Keeping on top of your finances can feel a bit like spinning plates and it only takes a lapse of concentration or something unexpected to go wrong and everything starts collapsing around you.
If you would rather feel like you have greater control over your money you need a plan.
Here is a look at some suggested strategies for mastering your personal finances including why you need to set goals, how to find extra cash when you budget, and ways to get more out of your savings.
Decide where you are heading with your life and your money
Drifting along from one month to the next can eventually catch up with you and you might end up reaching a certain age without having really achieved anything specific with your money and maybe even your life.
It feels good to have a plan and things can often turn out better when you set some goals to aim for.
There are always going to be a few temporary financial blips where you might need to use someone like King of Kash to help you cope with an unexpected bill for instance, but the main thing to remember is that you can often transform your financial situation if you give yourself the confidence that comes with knowing that you are working to a specific plan.
The sort of goals you want to set yourself includes clearing your current debts, saving enough to be able to buy your own home and working on a retirement plan.
It starts with a spending plan
There are several key steps to successfully executing a financial plan and the first part is to create a budget and a spending plan around those figures.
Your first priority is to work out exactly how much you are spending each month and that means calculating everything down to the last detail, from the big monthly payments like rent or mortgage, utilities and possible car payments or other fixed loans, plus all the small incidentals like buying a coffee on the way to work, as these can also add up to a big number when you add them all together.
Once you have all the figures you need you are ready to press on with a strategy to help you reach your goals.
Create a list of priorities
Having created a list of all of your current expenditure and worked out where some savings could be made to create some extra cash from your existing income, you can then set to work on deciding what your short and long-term financial goals are.
You will need to decide if the money you have managed to free up should first go towards clearing your debts as the top priority and then look at future aspirations after that.
If you prefer the idea of splitting your spare cash and allocating the money to different targets at the same time that will also work, as long as you manage to stay focused and disciplined with your budget and savings targets.
Don’t forget emergency savings
There are some things you simply can’t anticipate like your boiler or car breaking down and it is these sort of things that can knock your finances off track and throw your monthly budget into chaos.
It would be a good idea to set a short-term savings goal of putting away some money each month until you have enough emergency money available so that you could cope with an unexpected bill.
Ideally, it would be good to have the equivalent of three months worth of expenses available in emergency savings so that you can cope with unforeseen bills and even losing your job for a short period of time.
If you can be astute enough to put aside some spare cash for emergencies you will have already demonstrated that you are able to set and achieve realistic financial goals.
Use this confidence in your ability to sort out your finances and set some goals.
Get help if you need it
Even if you are now more positive about your financial future and feel more equipped to cope, it doesn’t hurt to get a professional second opinion or some tips in areas where your knowledge might be lacking a little.
For instance, if you want to to try and maximize the return on your investments and get some insights on how to plan for your retirement and other specific goals, talk to a financial planner.
The main message to take on board is that when you set goals you improve your odds of mastering your finances.
Harry Bryan is a personal finance consultant who writes articles, sharing his knowledge around the web with anyone who wants to read his words!
Having a plan to strive towards is so important … great post!