Monthly Archives: June 2009

Ten Commandments to organize your finances

 

finance

finance

It might sound tough to be able to organize your finances. But if you are not doing so, you will have to face serious consequences of not taking of it in the right time. Clearing the financial mess is a tougher job if you don’t keep your finances in order. Everyone has some inborn qualities and it is our duty to master our skills, especially the financial areas to make a better living.

You might think you need to take a masters of business administration online course to make heads or tails of budgetary matters, but with these tips you will be on your way to being financially savvy.

You must follow the Ten Commandments in order to organize your finances.

1. Prepare a budget: having a well planned budget over your income and expenses will avoid any kind of unpleasant situations when your pockets go empty in shopping malls and beer bars. This will also allow you to see how much you can save in a month.

2. Reduce your expenditure: Your expenses should always be less than your total income otherwise you will fall into debts. Cut out all those expenses which are unnecessary. It’s good if you can set your own priority to make things easier. This way, you will be able to draw a line wherever needed.

3. Stress more on to savings: When the expenses go down, the disposable income goes up. Just in case if you lose your job, go through your budgeting once again so that you can squeeze out some amount of saving which can be used for better purpose when required.

4. Create emergency fund: It is very important to have some emergency fund so that you can use it when someone in your family falls ill, or there is a job loss. It’s always a good idea to keep aside at least six month of your expenses into this emergency fund. This way you won’t feel lost when hard times hits in.

5. Cut out luxury: Cut out luxury if you are looking into saving some money. Opting in for car pooling instead of daily commuting in your own cars is a great way of saving money.

6. Pay bills regularly: Paying bills regularly and within the due dates avoids any late fees and other charges.

7. Make regular credit card payments: Interest rates on the credit cards are very high if you are not paying the full amount. If you are just paying the minimum amounts on or before the due dates, it’s eaten up in interests and fees only every month and nothing is going towards the principal balance.

8. Invest with caution: Investing your money for your future is definitely a good idea. Watch out for any kind of scams and scandals which could strip off the amount invested.

9. Avoid loans: Do not make the habit of taking any loans if you are already in some hard financial situations. Just imagine if your financial situation does not get better in the coming times, and you build the habit of taking new loans, it will be too hard to come out of the overwhelming debt trap.

10. File your taxes: You must not evade tax to save money. Tax evasion could earn you a fine which would be greater than your tax amount. There are ways to get tax relief and savings is one of the important factors to get the tax relief.