Everything you need to know about the Debt Snowball Method What if I told you…
Money makes the world go round. However, managing it isn’t as easy as folding clothes after doing laundry. Instead, it’s a continuous process, even for people who are “well to do”.
Managing finances, or “decluttering,” is beneficial to make money work for a person. Therefore, it is vital to ensure you won’t run out of money anytime soon. But how can people better keep track of their finances? Here’s how.
1. Check Your Status
Managing finances requires people to be more self-aware. It’s important to know where you are in terms of your expenses and profits. Although various applications help people track cash flow, the traditional pen and paper method shouldn’t be discounted. Learn to watch over all your expenditures, as even a few dollars may contribute to a discrepancy in your calculations.
Next, try to organise your expenses according to how much you need them. Of course, your basic needs, such as food, shelter, and clothing, should come on top. Next, think of all the utilities you pay for—internet, electricity, and water bills. If you’re paying for other things, make sure to write them down as well. Lastly, add all your expenses under “non-essential”. Regardless of its nature, a trip to other countries or a new bag, include them in your list.
2. Think About How You Spend
After creating a list, it’s time to declutter. Decluttering could include:
- Cancelling out a few of your leisure activities
- Cancelling unnecessary credit cards
- Consolidating all expenses in one card
- Shopping around for better deals with your utilities and subscriptions
Remember that cost-cutting isn’t a downfall to anyone. Instead, it only ensures a more secure future for everybody. Identifying which expenses you should eliminate will make it easier to keep track of your finances better. Of course, it also adds up to your overall savings.
3. Take Care of Insurances
People’s views on insurance vary. Some think it is a good investment, while others see it as a waste of money. However, getting an insurance policy is another way to secure your finances for the future.
Before getting your policy, try to identify the coverage and fit your needs at your current life stage. For example, people who moved into a new house or had their first baby may need insurance to protect the property or their family. Additionally, there are personal insurances, i.e. income protection to cover your income should you become sick or injured for a prolonged period of time or trauma insurance to cover medical and recovery expenses if you suffer a serious medical episode.
4. Look After Investments
Investments are always a good choice for maintaining a good, steady cash flow. However, if your investments are beyond your income, it’s best to include them in your decluttering process.
Before deciding, it’s best to seek advice from professionals on how to restructure your investments. Meanwhile, for people letting go of assets, think of it as a freeing decision that creates possibility and helps you move forward to your next chapter in life.
5. Hire a Good Financial Adviser
Lastly, finances are tricky to manage. It would be wise to hire an expert to help you set goals and formulate a personalised strategy to help you achieve them.
Professional financial advisers help people look after their finances and provide ways to make them grow more and work for you instead of working for it. If your finances allow it, make sure to seek financial advice today.
Ready to Declutter
Decluttering is an effective method to guarantee your money is well-spent and protected. Before proceeding with the process, make sure to outline your budget first and try to forecast your income and expenses. That way, it’s easier to start the process of making your money more secure for the future.
As investment planning is critical nowadays, Newcastle Financial Planning Group aims to guide clients through sound financial advice. Serving the area of Newcastle and the Hunter Valley, our team of investment advisers will listen and provide financial solutions for your needs.
To know more about tips in managing your finances during your retirement years, check out these posts:
- How a Downsizing Contribution Supercharges a Retirement Plan
- 6 Ways To Ease Your Debt Burden
- How to pay off your debt fast without sacrificing your lifestyle
Are you ready to take action and achieve your financial goals? Book a complimentary meeting today!
DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Coastal Advice Port Macquarie and Sydney Wealth Advisers are subsidiaries of Coastal Advice Group which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.