|Arla Wallace is an accounting professional with over 20 years experience. She spent several years working for both publicly-traded and private entities before founding her own business. Today she partners with small business owners so they can focus on operations while leaving the responsibility of staying on top of accounting tasks to her. She is a Certified Public Accountant (CPA) and a Certified ProAdvisor for Quickbooks Online.|
Managing Personal Finances
Do personal finances leave you feeling anxious? According to U.S. News and World Report, 40% of Americans find it hard to pay for household expenses. A core skill necessary to succeed in running a household is financial literacy. Yet, this skill is not taught in most primary or secondary schools. Fortunately, money management can be learned at any age and, like any other skill, will get better with practice.
Take Control of Your Money
While it’s normal to want more money, don’t let this desire control your life. Money has a purpose and is a tool that can help you provide for yourself and your family, and allow you to do the things you like to do. However, when you plan your life around money, it weighs heavily on your mental well-being and on your happiness. As such, know that it is possible to find peace with money at any income level and at any stage in life.
Get Finances in Order
To maintain greater control over personal cash flow, organizing your bills and establishing a system to keep track of due dates is helpful. Without organization, you may miss due dates or forget to make a payment. The negative effects of late payments can lower your credit score and make it more difficult to qualify for competitive loan rates and mortgages. Consider setting up automatic payments so bills are paid on time. Store your financial documents together in electronic files or on paper in an easy to find location. This will provide better access to both yourself and your beneficiaries in times of emergencies.
Track Your Expenses
Analyzing your accounts (checking, savings, and credit cards) can help you identify spending habits. There are many apps available for smartphone users that can simplify the process of getting your information in a central place and categorizing purchases. And, you might not have to look far—check with your bank to determine if they have an App you can use and what expense tracking tools are available to you. Using the information you learn from your spending over a period of time can help you make changes for the future to control spending. Seek ways to lower discretionary spending, or even lower your higher fixed costs (housing, utilities, and automobiles) to help you spend less.
Set financial goals
Identify financial objectives you want to achieve currently as well as later in life. Examples include building an emergency fund, buying a home, paying for college, eliminating debt, saving for retirement, or planning for fun and travel. Assign a priority to each goal, set a timeline, and determine the amount of money that will be needed. Financial goals will look different from person to person; therefore, choose what is important to you so that you can decide how to save money as well as make adjustments over time when needed. Take time to review your financial goals annually to hold yourself accountable and help you get where you want to be.