Money tip – Money Management
Personal finance tips that can help you manage your money better.
Create a budget
Create a budget based on your monthly income and expenses. A budget is the tool that gets you to stay on track financially every month. A budget shows you exactly where your money is going so you can know whether you’re on track with your income and expenses. It’s your blueprint for achieving your financial goals.
Track your net worth
Track your net worth to get the big picture of your entire financial situation. Your net worth is a snapshot of your assets and liabilities at a given time. Your net worth measures what you’re actually worth financially. It’s important to know what your net worth is if you want to build wealth. It’s not enough to only budget. You need both a budget and to track your net worth.
Use a third-party aggregator
If you manage your finances electronically, you may feel more comfortable using a third-party aggregator to get the big picture of your financial situation. Mint.com is an example of one, there are more. This is ideal if you want an app on your phone and prefer using digital budgeting and net worth tracking opposed to doing it manually.
Check your credit reports and credit score annually
Check your credit reports annually. Even if your credit card company offers credit monitoring or reporting, it’s a good idea to check your actual reports. The reason you should check your credit reports annually is to verify all the information is correct, and make sure your identity hasn’t been compromised.
Get estate documents in place
Make sure you have the right estate documents in place, this varies for everyone It is best to see an attorney. It’s really important you have the right estate documents in place. It’s worth the couple of grand you may have to pay to protect your family.
Get the right insurance coverages
It’s important to have the right insurance coverages in place to protect you and your family financially. This includes property and casualty insurance, medical insurance, life insurance and disability insurance, just to name a few types. It’s easy to overlook insurance, but if something tragic or unexpected happens to you, it would be even more devastating without the right insurance.
Project your taxes
Tax planning is one of the most effective ways to save money every year. If you have the opportunity, talk to a CPA or financial planner to do a tax projection for you. You may find ways to save money through tax planning that you’re not taking advantage of.
Set financial goals
The way to change where you are financially is to set goals. Goals give you a target to plan ahead for. If you need to pay off debt, save for a house, or something else – you can use goals to help you get there. Setting financial goals can change your life.
Have financial planning meetings to review your money
Have a set time to review your finances yourself and with your spouse. You need to review and re-evaluate whether what you’re doing is working. You need to make changes as your life changes. I like to review my money weekly so there’s less to go over at each meeting, but you can decide what works for you – monthly or quarterly may fit with your life better depending on where you are financially. The point is to not set it and forget it. Your finances need to be reviewed periodically.
Until next time.
The MoneyShop Team
This article has been prepared for information purposes only and it does not constitute legal, financial, or medical advice. The publication, journalist, and companies or individuals providing commentary cannot be held liable in any way. Readers are advised to seek legal, financial, or medical advice where appropriate.