5 Steps of Effective Personal Finance
- Organize your debts according to the interest rate and develop a plan to pay them off over time.
- Record and track your income & expenses (cash flow) month by month and sort the expenses into their respective categories.
- Review your cash flow monthly to identify the elasticity, priorities and patterns of your income & expenses. Take control over how, when and why you spend.
- Decide on your destination. Take a piece of paper and describe your preferred lifestyle in 10 years (or 20 years if you are under 30).
- Create your financial road map. Using 4 columns decide: what you need to do to get from where you are today to where you want to be in 10 (or 20) years, how much it’s going to cost to do that, when you need/want to do it, and what your monthly savings needs to be to achieve it in the time frame you have chosen.
Like to Speak to Sheila directly? Have a question on your debt and personal finance? Contact Sheila
Having a better understanding of how, why and when you spend your money will help you to better control your spending habits. Keep tracking your cashflow over the next few months and watch to see how your priorities and pattern change now that you understand yourself better. You may find that as your spending habits change you actually have more money available to reduce your debt even faster and to start thinking about setting some financial goals.
Sheila Smelt & Associates Inc. are committed to assisting you find solutions to your personal finance, these 5 Steps to Effective Finance are just a small piece of the pie.