Five Simple Tips For Personal Finance Success
Most people have no idea about dealing with their finances when they first leave home. The fact is that they are thrown into the adult world, with all of its pitfalls, and are expected to figure it all out on their own. This article will help you out by teaching you some simple strategies for mastering your personal finances. You will no longer be fumbling around in the dark for help!
The first step is to create a budget. Include absolutely every penny you spend. That will mean keeping receipts when you make purchases so you can enter them into your spreadsheet every evening. You also need to know what income you are expecting and then update your spreadsheet when it arrives. That means you need columns for "To Be Spent", "To Be Paid To Me", "Has Been Spent" and "Has Been Paid To Me". That will give you a good picture of what your finances are like at the moment.
If you run your own business, or have any expenses you can write off at tax time, you need to keep them on a separate spreadsheet. Be sure to keep a detailed list including the name of the item you bought, where you bought it, the price (with or without tax, depending on whether or not you can claim taxes separately from the purchase price), and what percentage of the time it will be used for business. Ask your accountant for more detailed advice on your personal situation as well.
When tax time comes around, be prepared. Use your budget to calculate what you have earned and what you have spent which is tax deductible. Even if you use an accountant, you need to have these numbers readily available to be sure he can get what he needs from you. File your taxes early so that you are sure they're completed on time.
Start setting goals for paying off debts or saving money. For example, challenge yourself to buy nothing but groceries for an entire week. If you are successful, reward yourself by going out to dinner or purchasing something small but wanted, like an album on iTunes. If you are driven to meet your goals by rewards, you are more likely to try hard and actually achieve them.
Figure out which expenses you have that are musts and which are just wants. Try to whittle down your wants, such as buying a coffee before work or going out to dinner on Friday nights, so you can instead put that money away for an emergency, use it to pay off your debts or even put it away towards your retirement. When you use extra money for these purchases, you will be able to reach your goals much more quickly.
It doesn't have to be hard to master your personal finances. You just have to use these tips every day to be sure you stay on top of your income and debts. When you put the effort in, you will be rewarded with some peace of mind.
