No matter how comfortable you are financially, there are some things that you can do to improve it. And, for those who aren’t feeling comfortable and have a lot on their plate when it comes to debts and money worry – an audit can help.
The word audit tends to worry people, but in this case, you are giving yourself the audit – so there is no need to worry.
Gather Information
Gather up all of the financial documents you have. It is often the case that people keep documents that are years old and no longer important. For these, it is a good idea to use a shredder – financial safety is paramount when disposing of such items.
Look out for bank statements, credit card statements, tax returns, bills, investments, old accounts, any applications you have made, rental agreements, mortgage numbers – everything.
From here, shred everything old, or that doesn’t matter, and add everything necessary into a pile. You can create a net worth value here if you want to – and it considers any luxury goods you have, real estate, gold, investments, and liabilities.
Income and Expenses
Taking your credit card statements, bank statements, and anything else, look at what you really have coming in and what you are actually spending. Many people overspend by a long shot and don’t realize it.
Highlight anything that is costing you money but you aren’t making the most of it, and cancel it if you can. In some cases, you might be charged to cancel it, so you’ll need to decide if that is going to work for you or not.
Set Financial Goals
Your financial goals could be looking at your income and thinking about getting a side job; it might be that you see one of your credit cards is costing a lot, but you’re only paying interest, and it is cheaper to get a cash advance and pay the credit card off, and repay the cash advance at a lower rate. It might be that you have little to no debt, and you need to start creating saving pots.
With all of your incoming and outgoings now laid out before you and a total amount of debt, if you have some, you can start to work on a budget and spending plan. For most people, spending less is going to come highly on the list.
Debt Management
During your audit, it is a great time to start getting in touch with the companies you have debt with and see if there can be a better payment plan for your circumstances. Often, with a quick conversation, you can reduce your payments and, in some cases, freeze the interest. Any debts that you have completely ducked, it is time to get in touch with those companies, too. If you feel overwhelmed, then contact a debt company to help you.
Setting up checkpoints for your finances where you look at the progress you are making, typically every three months is a good idea. You can see how your savings are going and if your debts are coming down at the rate that you need them to. Savings are one of the things that many people want to do the most; here are some tips for that: 5 Tips To Help You Save Money Around the Home | Focused Spender.
