Organizing your personal finances can be difficult and confusing, as you may have multiple sources of income and numerous credit cards and ways of spending. Or you may be bad at stopping yourself from impulse buying or online shopping.
Regardless of your situation, we are here to help you get your personal financial planning on the right track. This article discusses three of the most valuable personal financial planning tips that will help you organize your spending.
Outline Your Financial Goals and Budget
One of the most important things you can do to properly plan your finances is figure out your goals and budget to meet those goals. To do this, we recommend taking the following steps:
- Ask yourself how much money you would like to save each month.
- Figure out how much you earn each month.
- Calculate your personal fixed costs, such as rent, mortgage payments, etc…
- Go through your spending habits for the past few months and calculate how much you have spent on average. It would be helpful to also organize your spending into categories, such as groceries, house supplies, restaurants, etc. This step is crucial because if you want to budget to meet your goals, you must know how much you are spending and where you are spending that money.
- Go through your spending habits and see where you can make cuts and where you can afford to spend more. Then, create a budget for each spending category based on your personal financial goals and what you can afford.
We recommend making a spreadsheet with the information you obtain from the steps above. This will help you visualize everything and allow you to organize your thoughts.
Pay Your Credit Card Bills in Full
We can’t stress this enough. Paying your credit cards in full each month is crucial for avoiding debt and keeping your spending under control. If you only pay the minimum amount required each month, the credit card company will charge you high interest rates and your debt will grow.
Yes, it seems nice to only have to pay $35 of a $1,000 bill up front, but it won’t seem as nice when the credit card company charges you interest each month on the $965 you didn’t pay right away. And that interest could grow into thousands of dollars owed over time. Plus, not paying upfront will hurt your credit score. The bottom line is that you should without question pay your credit card bills in full when they are due.
Get Professional Help with Personal Financial Planning
If you are a big spender or you just feel like you could use some help with your spending and financial planning, we recommend seeking professional help. While you would of course have to pay for this help, the amount of money you will save by avoiding credit card debt and overspending will more than pay for the cost of a personal accountant.
If you would like help with your personal financial planning, please do not hesitate to reach out. With the full range of accounting services Allman & Allman APAC provides, we are equipped with the expertise for which you may be in need. Seeking guidance from our firm will provide you the opportunity to work with individuals armed with broad and deep financial knowledge, able to provide advice on a wide range of issues. As a full-service public accounting firm, our professional services will surely help you succeed and thrive. Please feel free to reach out to Allman & Allman APAC via email at Genna@allmancpa.com or via phone at 760-773-1120 to discuss your situation and find out how we can help you grow. We look forward to hearing from you.