Organising personal finances

Learning how to organise your personal finances can be the best thing you can do to maintain financial security.

10:00 31 December 2013

Managing personal finances is something we learn well into adulthood. They do not generally offer courses in primary education. As a result, many people end up having problems with debt because they do not know how to create a budget or plan for things like retirement, emergencies and large expenses.

Here are a few tips to organising your personal finances:

• Know your assets and your expenses. The first step to understanding your finances is to know what is coming in and what is going out.

 

• If you have a large amount of debt and you are struggling, eliminate anything that is not an absolute necessity.

 

• Create a budget and stick to it. Make sure to include things like savings and retirement. If you are looking to make large purchases then create categories for them in your budget and pay into them.

 

• Create projected budgets; these are budgets you can create for the future. They are done at the beginning of the month or the end of the previous month for the next month. At the end of the month go over everything and see how close you were. Your projected budget should be slightly higher than your actual budget. This gives you a built in financial cushion in your finances.

Working personal finances will only be successful if you create a plan and stick to it. Many people create a budget and then do not like the way it restricts their spending. However, that is the entire purpose of a budget. If you have available assets, you can set aside money for impulse purchases, if not concentrate on getting to the point where you have discretionary funds.