Becoming an expert at managing your personal and business finances may seem difficult, but everyone can manage their finances wisely. Without conscious money management, you can easily fall into debt. Use the following strategies for successful financial management.
List Your Debts
First, list all of your debts. It is difficult to be in control of your finances without knowing every debt you have. This should include all forms of debt: credit cards, personal loans, loans from family members, student loans, business loans, car loans, mortgages, etc. Once you know exactly how much you owe, you can begin to make a plan to pay it off.
Create A Written Budget
Next, create a written budget. List all of your projected monthly income and expenses. If you have a surplus after deducting your expenses from your income, develop a plan for this additional money. If you or your business has debt, develop a plan to pay it off as quickly as possible. If you have no debt, create an emergency savings fund. After you have savings in place, develop a plan for long-term investing.
Compare Your Budget To Actual
Once your budget is established, track your actual income and spending and compare it to your budget. This will help identify areas not budgeted accurately or areas of overspending. Creating a budget and tracking against your actual income and expenses will allow you to get a handle on your finances.
Reduce Your Spending
Once areas of overspending are identified, develop a plan to begin to live within your means. You may need to adopt a more frugal lifestyle to successfully manage your personal and business finances. This could mean cutting expenses. Some ideas include stop eating out as frequently, shop around for lower insurance rates, cut your cable or negotiate a lower rate, and comparison shop where practical.
Increase Your Income
Sometimes lowering expenses is not enough to get control of your financial situation. In these cases, you must explore ways to increase your income. There are many ways to do this, including working more hours, asking for a raise, taking on additional part-time work, or selling goods or services.
Finally, know when to seek financial help, say the experts at Keith G. Collins Ltd. If you have done all of the above steps and are still having difficulty managing your personal and business finances, seek the help of a professional credit counselor. These professionals are experts at handling difficult financial situations.
Following the six strategies above will help you become an expert at managing your personal and business finances. Don’t let debt or bad credit take over your life.