A Six-step Program For Organizing Personal Finances

By Author: Alisdair Cosgrove
Total Articles: 184
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With so many sources available today, you are already acquainted with a number of tips on how to reduce debt and manage your personal finances. Yet, for every decent bit of advice, you have multitudes that do not take it the next step and put them into practice. Take a few minutes and to review the following comprehensive personal finance strategy.

First, you will want to take at least a couple of months and keep track of everything you spend money on. You may find that taking the time to look closely at your expenditures brings new perspective because you can actually see where large portions of your income are going and help you to see how little purchases can add up fast. For many, the close of this period is accompanied by changes in spending habits; many will end up spending less than they did at the beginning of the period. Next, you will want to take the monthly expenses and separate them into different areas. This might mean labeling them as "dining," "bills," or "savings," etc.

After you have taken the time to arrange your expenses properly, you will be free to move on the next step. Now, you should ...
... work out how to lower the cost associated with these different categories. Keep in mind what different expenses will do to your overall financial circumstances and be prepared to sacrifice.

Once you are spending less money, you will start to accumulate a surplus from your paychecks. This extra cash can be used to pay on outstanding debts. As a note, try to focus on paying down those debts that have the highest interest rates}. Any extra money available should be used to reduce those first. If you have managed this step well, you should be able to live comfortably on less money while also having the means to lower your debt.

While cutting costs and expenses, you should start looking for extra work. This might mean something different for people due to his or her different jobs and personal situations. It is important to realize that you will have look for opportunities such as overtime, pay raises, and even locating a job that pays better. If you have any skills or knowledge, even contacts you might consider using them also. Above all be creative; the sky's the limit and there are more opportunities than you might realize.

A vital element that makes all of this work is paying for everything in cash rather than using credit or a loan. Not only will purchases be less expensive, you may be able to negotiate better prices and avoid the bane of paying interest. At the same time, you should understand that in order to use money to buy things, you might have to wait longer for those big-ticket items. Using cash means that you are not using credit cards and racking up debt, unless you have a plan to pay the balance off every month .

Once you have organized expenses, increased your income with supplemental sources, and halted the increase of personal debt, you should have more money entering the household than leaving it. The time has come to consider how you might invest this extra money. You may be interested in stocks or mutual funds. Then again, you may have a new business venture in mind or might put the cash in high-interest bearing account.

You are probably aware of the fact that these ideas are not new. Most are fairly common sense strategies. By using a strategy like the one outlined above, you put yourself in a position to strengthen your personal finances and plan a secure future.
Alisdair Cosgrove has been writing personal finance articles for many years and can find more of his work at the UK site TheMoneyStop.co.uk, offering interest free credit cards along with great best business bank account and also unsecured personal loans. Visit today to find a great deal or read one more of Alsidair's great articles.