If you struggle with saving money and paying your monthly bills on time, you are not alone. In 2017, the employment site CareerBuilder reported that eight out of ten Americans live from paycheck to paycheck and have little to no money set aside. However, you may be able to change your financial circumstances with a bit of effort and insight. Organization can be key when it comes to managing money, and there are several strategies you can use to build your confidence as well as your savings account.
1. Start With Your Net Worth
Discovering your net worth can be an important step in organizing your finances because once you know what this figure is, it may help you build a more effective budget. Your net worth is the number of assets you have, minus the debt you owe currently. For example, if you own your home, you have more net worth than someone who is paying a monthly mortgage. Seeing your net worth on paper can provide you with a springboard for creating a more viable budget.
2. Be Detailed When You Track Spending
Today’s mobile banking apps come with a variety of pros and cons, and while they may offer some tracking features, they might not give you the big picture when it comes to your spending. Detailed tracking can bolster your budget and help you see where you might be wasting money. Track your spending manually and divide your expenses into different areas, such as what you spend on gas, groceries, lunches out, and monthly bills. You may be able to see where you can cut costs when you look at these expenses individually.
3. Have a Bill Tracking System
Even if you pay your bills online, it may help you to stay organized if you develop a quick and simple bill tracking system. Whether you write them down on a calendar and keep them on your desk or keep an online day planner you can access at any time, tracking your bills can be helpful for avoiding late fees or missed payments.
For example, if you pay your car insurance online or through an app, you can still track your payments in several ways. Note the amount, when you paid it, when the payment was posted, and whether you use auto debit or pay it manually. The more you know about your monthly bills and how they relate to your budget, the more efficiently you can handle them.
Managing your money and building a savings account, whether you want money set aside for emergencies or a major purchase later, can be challenging. However, if you work to organize your finances, it can help you discover paths to savings you might never have considered.