So, October is financial planning month. In the first place, it is important to work on your finances. With a plan, you can set up short and long-term goals.
Financial Planning Month
First and foremost, it is important to plan a monthly budget. When you first start a budget, write down your income and your monthly expenses either on a piece of paper or spreadsheet. In the same way, it is important to keep tabs on how much money you have in your checking account, savings account, and investment accounts. Once you have this information, it is important to see if you have fees associated with any of your accounts. In addition, it is important for you to know the interest rate.
If you’re on a salary, you know how much you take in each week. By the same token, if you’re paid hourly, this can be a little bit tricky. Since, your pay may vary weekly, try to come up with a monthly average. Next, it is important to determine all your fixed expenses. Hence, if you have recurring monthly expenses: it is important to know the total amount you owe. Moreover, this includes any loans, credit cards and automobile payments.
Your Net Worth
So, once you’re aware of your earnings and debt, you can determine your net worth. Meanwhile, this is easy to do. Just add up all your expenses and then subtract from your money you have on hand. So, this number you come up with is your net worth.
For this reason, it is important to gain control of your finances and expenses.
Financial Adjustments
Since we all have unexpected expenses, it is important to save for a rainy day. After setting up a budget, you can see what monies you have left over. If you don’t have any money left over, chances are you’re overspending. Or, not living within your means. Or, you don’t make enough money,
If you have a little money left over, try to set a small amount to throw into a savings account. Because prices and costs increase, it is important to plan ahead. Because sometimes life throws you a curveball, be prepared to make adjustments in your budget.
Conclusion
On the other hand, if you don’t have a budget, now is the time to create one. Keep it simple. As you keep track of your monthly expenses, you will be better disciplined to handle any unexpected expenses.
Do you have a budget? As you get more comfortable with your finances, you will be able to breathe easier. Indeed, no one wants to live paycheck to paycheck. Are there any financial planning month tips that have worked for you? What hasn’t?
As always, I welcome your comments.
