4 Simple Steps to Organize Your Finances

Financial Psychology Center on LinkedIn: We've all heard that money can't  buy happiness, but have you ever…

With summer quickly approaching, it’s easy for your finances to take a back seat to all the invitations you’ll receive for fun summer outings. The temptation of warm summer days makes it hard to turn down invitations, even if they strain your budget. But don’t let summer ruin your finances. Here are some tips to tidy up your finances just in time for the summer season.

1. Track Every Expense

Stop letting small purchases add up to the point where you’re wondering, “Where did my money go?” Keep track of every expense. Use a running log on your smartphone if you prefer cash, or use a credit card for daily expenses but make sure to pay it off daily. Paying off your credit card daily helps you avoid accumulating debt and keeps you accountable for all your expenses, making you aware of how those small, spontaneous purchases add up.

2. Set Up Automatic Payments

Never miss a bill by setting up automatic payments. Late fees can cost you a lot and can damage your credit. Ensure you pay all your bills on time by automating your payments. To streamline this further, consider setting up a checking account solely for bill payments. Transfer the bill amount into this account on each payday, and have automatic payments deducted from it. This way, you’re never late on a payment, and your bills are already accounted for in your budget.

3. Review Your Accounts

Are you still holding on to that store credit card you opened at 16 for a 10% discount? It might be time to let go. Store credit cards typically have high interest rates and minimal benefits. If you’re tempted to use them because of sales, freeze your card in a block of ice or cut it up. If it’s a bigger issue, consider closing the account, but be aware that your credit score might dip, especially if the card had a high credit limit. For better management, stick to one all-purpose credit card with no annual fee and good rewards. Discard or close any unused accounts to simplify and better manage your finances.

4. Go Paperless

How often do you actually open that bill statement you receive in the mail? Chances are you manage most of your finances online. Align your financial habits with your lifestyle by opting for e-bills. Many banks offer this option, making it easier to keep track of bills and expenses. Switch to paperless billing for your accounts and step into the 21st century.

By following these tips, you can enjoy your summer without letting your finances get out of control.

 

Leave a Reply

Your email address will not be published.