How to Organise Your Finances – Easy to Follow Guide!
We all know we have to “be financially responsible,” but what does that even mean? Of course, we want to have complete and total control over our finances, but sometimes it’s hard to know where to start.
There are so many moving parts to having a healthy financial system, and it’s far easier to ignore the mess. The problem with this is that we end up scrambling to clean up the inevitable financial problems that come along, instead of being prepared with the tools to minimise their effects on our lives.
You’re about to learn how to easily organise your finances at home, and keep up a healthy relationship with your money this year.
We’re going over five action steps to wrangle the mess and get you on the path to managing your money the right way.
Organising your finances is going to reduce clutter, reduce the number of times you have to think about it, and reduce your stress most of all.
If you’re not where you want to be financially or if you’re feeling frustrated, overwhelmed, or confused about how to manage your money, there is likely one thing holding you back: organisation.
Organising your financial impact can have a huge impact on everything your money touches. It will save you time, frustration and money! In this post I’m going to organise your finances.
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How to organise your finances
Organisation is vital to your financial success. It’s actually the one thing that will have the biggest impact on correcting your financial mistakes and setting yourself up for a successful future.
If your finances are kind of messy right now, cleaning them up can sound like a really hard, scary thing.
I used to be a complete financial mess.
Actually, mess is probably too gentle a word. Disaster is more like it.
I was spending way more money than I made, mostly on stuff I didn’t know that I didn’t need. I was completely irresponsible when it came to things that weren’t fun, like paying my bills on time. And I was too terrified of my debt to even think about it.
I thought my problem was that I didn’t make enough money.
I was wrong.
My real problem was that I wasn’t looking at the big picture. In fact, looking at the big picture wasn’t even an option because my finances were so unorganised, I didn’t have a big picture to look at.
It was when I finally got myself organised that everything changed for me.
And you know what? A few years later, I’m pretty damn good with my money. I have things like a savings account, a retirement plan, and have destroyed massive chunk of my debt.
You know what else? It wasn’t painful. In fact, once I adjusted to a different way of doing things, I kind of liked it.
So, if looking at those numbers and getting your finances organised is something that scares your pants off, I totally get it.
But truthfully, it’s not as hard as you think it will be. And the benefits are totally worth it!
How can organising my finances help you?
Organising your finances will allow you to reach your full potential.
And on the flip side, being unorganised will block you from having all the information so you won’t even be able to know what your full potential is!
Organisation will help you reach your financial goals
It will be harder to set goals and when you do, they’ll be more like vague things you want in the future instead of clear, pinpointed goals based on actual information.
Knowing exactly where you stand financially and exactly where you’re headed will make it easy to set goals in stages that lead you to reaching your big goals over time.
When your finances are unorganised, you might not even know that you’re missing out on ways that could be doing better. You might think you’re doing just fine.
But organising your finances will show you your weak spots and where you need to focus.
In taking the time to get organised, you will probably find that with a few tweaks you could be doing WAY better at managing your money.
See my post for setting financial goals:
How do I organise my finances?
It is so much simpler than it sounds!
Here are 5 steps that helped me!
Always look at the bigger picture
First, you need to take a step back from the day-to-day and look at the big picture of your finances. How much money do you have? How much do you owe? What is your net worth?
If you’re afraid to crunch these numbers because you don’t want to see the big picture of the financial mess you made, I get it.
I felt the exact same way.
But you’ve got to do this step if you ever want to fix it. And you’ll probably be surprised to find out that it’s not actually as bad as you think.
Create a monthly budget
This is so important. You cannot just make one budget and use it again month after month. Income fluctuates. Expenses fluctuate.
A budget that is specific to the month ahead is essential.
Determine how much money is going to come in that month.
Then allocate each of those pounds/dollars to a certain purpose. Pay your essential bills and then filter the rest toward debt or some form of savings.
See my post for setting financial goals:
Get on the automatic payments train
Why have to waste time and brain power pulling out your wallet, check book and computer several times a month, when you can set it and forget it?
Putting your bills and savings on autopilot is the easiest way to guarantee you won’t miss a payment and incur late fees.
In this day and age, where nearly everything can be automated, it’s silly not to have at least your fixed bills paid automatically. I’m talking about rent/mortgage, utilities, phone, insurance, your baseline bills that 100% need to be paid.
Most bank accounts have the option to schedule bill payments online automatically. If your bank doesn’t, the companies you are paying will most likely give you that option. You’ll be able to schedule the auto-pays online or by phone.
Don’t forget to “auto-pay yourself” first, and automatically transfer some cash into your savings account!
Always pay yourself first
Lots of people think that “pay yourself first” only applies to business owners. I actually thought this too!
Here’s what “pay yourself first” really means: The second each payment to you clears in your account, you automatically take out a percentage to SAVE. That’s it! You are giving 5-15% of your take-home pay to YOU, right off the top, before paying anything else.
Why do this? You’re telling yourself that YOU MATTER. You, and your future, matter to you. They matter more than whatever dumb thing you were probably going to buy with that relatively small amount of money.
The easiest way to do this is to set up an automatic transfer into a savings account.
If you are totally new to saving, start with 3% or 5%, and increase that amount after a few weeks, once you feel like you can save a little more.
Right now, it may not be as easy to save, I know it isn’t for me. But, every little bit counts.
Make sure to go through your credit card and bank statements, and cancel or suspend any unneeded subscriptions or memberships. That will help put more money into the pot.
Create a financial improvement plan
Now it’s time to make some important decisions:
How are you going to save?
How are you going to cut back?
Where do you want to be this time next year?
What about in 5 years?
Ask yourself the hard questions. It will be worth it in the long run.
And unfortunately, it’s not a one-time thing. Instead, it’s something that you have to work on continually.
I can tell you though that this process is hardest in the beginning and it gets much easier with time.
How to organise your finances – Final thought
It’s important to have some level of organisation in all areas of your life, and finances are no exception. Once you get the hang of it, you’ll see that all it takes is a little maintenance only 12 times a year, to keep your money working for you.
I hope you stick with your new Financial Organisation action plan. Having a financially responsible home doesn’t have to be hard. I’m rooting for you!
It’s time to improve your financial life and organise your finances.
Start by looking at the big picture, create a monthly budget and make a financial improvement plan.
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