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Financial management is tough. Few of us are ever taught how to manage our finances, so we tend to come to the practice through trial and error as much as anything more productive.
Given the complexities at hand, is it any wonder that so many of us get financial management wrong? If you’ve decided it’s time to change your money strategy for the better, then just making that decision is a positive step. Now it’s time to examine what comes next.
To truly take hand of your finances, you might be relieved to discover that doing so can be surprisingly simple — as simple as learning your ABCs in fact…
… Is For Accounts
How many financial accounts do you own? Can you name the number right off the top of your head, or would you have to go and check?
Taking it further, how many other kind of accounts strongly related to financial matters do you have? To get the true number, you need to factor in all of these different account types:
- Bank accounts
- Savings accounts
- Utilities accounts
- Rent/mortgage accounts
- Credit cards
- Your cable or even your Netflix.com account (as both required financial funding)
- Your insurance accounts and policies.
If you’re going to get a firm grasp on financial management, then you need to be checking these accounts every six months. Ask yourself if you’re paying for a service that a) you’re using and b) offers good value for money. By keeping tabs on all your accounts, you can bring even the most unruly finances to heel.
… Is For Borrowing
Everyone borrows; it’s pretty much essential if you want to live a functional life in the modern world. Even if you never put anything on a credit card and don’t have any loans, you probably borrow in terms of the mortgage you have on your house. You also technically borrow when you choose to pay an insurance policy in monthly, rather than annual, installments.
Keeping an eye on the money you’re borrowing is vital for the sake of your finances. If you’re also saving money, then you need to ensure you’re not paying more in interest on borrowing than you are gaining on your savings. It’s also important to keep your borrowing APRs down, by looking for 0% finance deals where you can find them.
… Is For Credit
The need for credit is unavoidable in modern society. You need a good credit score not just to be allowed financial products, but increasingly for products like a mobile phone account or even to acquire a job. If you have poor credit, then it becomes your sole financial focus. You need to take the matter in hand, look through creditrepair.co to improve your score where there are problems, and try and avoid defaults on existing borrowing.
It is not beyond the bounds of supposition to suggest that your credit score is the most important aspect of your financial dealings. It simply rules too much, has too much sway, to be overlooked. Monitoring your score and improving it wherever possible are essentials when it comes to your financial planning.
There’s no doubt that dealing with your finances and practicing sound money management is difficult. However, as the above shows, if you focus on the ABCs, then you’re going to be in good shape for the challenges in the future.
[ All images are courtesy of 3dman_eu ]