Know how much you’re spending
Before you can even begin to think about getting your finances in order, you’ll need to start by seeing exactly how much money you are spending. When you try to lose weight, you need to balance how much food you take in with how much exercise you do (calories in, calories out). It’s the same with your finances. You need to know how much money is coming in and how much of it is going out.
Most people are surprised when they realize how much money they spend on certain things. There are some great online tools available to keep track of your spending including Mint.com, BudgetTracker.com, or BudgetPulse.com.
Check out your credit report
If you are not keeping up on your credit report, there could be errors. Those errors can end up costing you by preventing you from getting the best rate on credit cards, car loans, personal loans, and other forms of financing. Even some employers check out credit scores before hiring and that could mean a significant reduction in wages.
You should check your credit report at least once a year. A credit monitoring service can help keep you on track. And of course, reviewing your credit report is often the first step in figuring out if you have become an identity theft victim.
Evaluate your insurance needs
Having proper insurance policies in effect can help prevent a financial catastrophe if the unthinkable happens. Many people think all they need is health and car insurance. Although these types of policies are important and necessary, they are probably not adequate to meet your needs. Evaluating your insurance needs annually will help ensure that you have the coverage you need.
Also, completing an annual review of your current insurance policies could save you money. For example, if you bought a 20-year term policy 10 years ago, it’s very probable that the rates have fallen. You may be able to get better coverage at a much lower rate. .
An annual review doesn’t have to be a lengthy, complicated process. It might just be a quick phone call to your insurance broker. By talking to your insurance agent (if you don’t have one yet, contact us), not only will you get the peace of mind that comes with knowing that you’re fully covered, but you may also get some extra money in your pocket.
Set a realistic budget
Now that you’ve determined all of your expenses and made any changes or additions to your insurance policies, you have a solid understanding of how much money is coming and going. You can make a budget by using pen and pencil, a spreadsheet, or an online budgeting tool. Just a quick Google search will give you an array of options to get you going.