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Everyone of us knows that managing your finances is hard. With all the bills, collection agencies, debt, overdrafts, unexpected expenses, babies, kids college, and loss of a job who would think it would be easy? In a two income world we live in now a days I relate managing our finances like trying to herd cats. We all know how hard it is to control one cat, but try and control 10,000 cats across the open range? :) Here is great clip from a Super Bowl commercial that will give you some context to what I’m talking about.
As funny as this commercial is we all know that financial matters aren’t always funny. Especially when it comes to mounting debt and the possibilities of bankruptcy. Here are a few tips to help you organize your finances to get off on the right foot.
- Auto Bill Pay – switching your bills to auto pay will ensure that your bills are paid on time and in full. Save both time and money on interest and surcharges.
- Budget – by setting up a budget it can help you get a handle on your income and outgoing expenses.
- Pay With Cash Only – according to a recent Dunn & Bradstreet study it was found the people who pay with cash typically spend 12-18% less.
- Emergency Fund – by setting up an emergency fund with 3-6 months worth of living expenses this can help you whether any unforeseen expenses or job loss.
- Money management software (Quicken or Microsoft Money) – these tools are excellent ways to manage your money and upload your monthly bank statements, investment statements, and credit card balances. From these statement it can help you formulate a budget based on your previous purchases and figure out your networth with the click of a button.
- Calculate net worth – take the time to sit down and calculate your net worth to figure out where you are at (investments/cash/home equity – liabilities = net worth).
Hopefully by taking the time to implement a few of these tips then you can get a handle on your finances and it won’t feel like you are trying to herd cats.