Do you wish you had a better handle on your finances? Are you scared of budgeting incorrectly? Here are a few ways you can take control and organize your finances no matter your current situation.
1. Cash Envelopes
One way you can organize your finances is to use envelopes. Consider how much you need to put toward rent, food, and transportation. Get enough envelopes for every category, and put the amount of money you need into those respective pockets. When you go to the grocery store, take your food budget but no other cash or cards. If you don't have the cash, you won't be able to spend on something frivolous.
Cash envelopes aren't for everyone. But if you find yourself going over budget each month, it can be a great way to reel yourself in. You can hold yourself more accountable than if you used your credit or debit card for all of your purchases.
2. Different Bank Accounts
You can also use separate bank accounts to organize your finances. Now, you don't have to use different accounts for your different day-to-day expenses. But you can have one account for your regular spending, and you can create accounts for an emergency fund and other small savings goals, such as buying a car. Putting money into different accounts can make it easier to see what money goes where.
It can also make it easier for you to save money if you have to transfer it to a different account. Because of this, keep your daily spending in a checking account, but make the others savings accounts so that you can benefit from a small amount of interest.
3. Review Your Accounts
Once you set up your various accounts, check them regularly. You can visit an ATM router to check your bank balance and perhaps deposit or withdraw some cash. While you can visit a bank teller, going to the ATM can be more convenient. You won't have to worry about going while the bank is open, which can be hard if you work or have school. The ATM is open at all hours, so you can go when you have time.
At the ATM, you can check the account balance for each of your accounts. That way, you can see if you're spending too much or if you're on track to meet your budget. Then, you can make any necessary adjustments to your spending habits.
4. By Denomination
If you want to get literal with organizing your finances, you can separate your cash based on the bill amount. You can start with your larger bills, such as $100 or $50 bills. Then, you can move to $20, $10, $5, $1 bills. Whenever you need to buy something, you can go right to the correct bills to pay for that thing. This can help if you carry a lot of cash because it can be easy to mix up bills.
When you have time each day or week, make sure all of your bills go in order to make paying for things less time-consuming. You can also use that time to see how much money you have, so you can see if you need to deposit or withdraw cash from your bank.
5. Track Your Paperwork
This last method is useful when it comes time to pay taxes, and that involves tracking any paperwork related to your financial status. Keep track of any paystubs you get, bills, and bank statements. If you get an interest payment, keep that receipt. And when your employer or a client sends you an income tax form, keep it safe. Once you're ready to file your annual taxes, you can use that paperwork to make the process easier.
You won't have to spend time searching for essential documents, so you can get started. And if you send your taxes to an accountant, you can send everything. They won't have to worry about asking for more information, so they can do your taxes in less time.
Organizing your finances isn't easy, but it's important if you want to set yourself up for financial success. Keep these tips in mind next time you find money overwhelms you.