This article is going to be very straightforward, because we will give you step-by-step instructions on how to get your finances in order within an hour. When these 60 minutes have passed, you will have a complete overview of your finances and you’ll be able to set clear goals. So, set aside an hour of your time and let’s get started.
Gather Everything in One Place
Take a piece of paper and a pen, write down all of your debts and separate them with an individual amount written beside each of them. Also, write down all of your investments and banking account information with the value or amount for each one.
Check Your Credit
In this step, you need to go visit AnnualCreditReport.com, to pull one free report of a credit bureau you choose, and once you get your report, look through it for discrepancies. If you by any chance have revolving credit card debt, you will need to switch to cash. Credit cards can in this case be a great tool, but you should not think about anything rewarding until you are out of debt.
Start Planning Your Budget
Take a piece of paper and write down your entire net income, after you pay your taxes of course, and make sure to include all sources. After that, write down every category you are spending your money on; for example, clothing, groceries, etc. Then, write down a n estimate of how much you think you can limit each one of those categories each month, and spend the next month tracking your every purchase to get a clear idea on those amounts.
Come Up with a Debt Payment Plan
Do not instantly think that you need to hire a professional debt relief company. If you are facing so much debt that you do not know where to start from and you are facing some legal problems, you need to consult a lawyer, because going to a debt relief company will not do anything for you that you cannot already do on your own.
So, figure out the amount of debt you owe. It will be easy if you have already done the steps above. If some of your debt has high interest rates, you can consider a balance transfer and save on the interest that way. There are two ways to start paying off your debt: the debt snowball and the debt avalanche, so choose one that suits you best and start working on this fast.
Do a Calculation on Your Emergency Fund
Come up with a plan to save $1000 as soon as possible, by getting into an investing game and using one of the leading robo-advisors, or by taking up a temporary side job. Try to figure out how much money you are going to need to cover your living expenses for one half of the year and think about having an emergency fund, if an emergency struck. Decide what amount you are going to save each month and save until you have fully funded your emergency fund.
Plan for Your Retirement
First, you need to check if your 401 k or any equitable fund matches or at least contributes enough to get a decent retirement, and for other retirement investing options, you need to decide whether the plan of your company or your own plan will be more efficient. Once you make your decision, you need to set a goal for contributing; of course, once you have paid off your debt. If you are considering to invest into your retirement plan on your own, make sure to educate yourself properly.
After you have gone through all of this, live within your means and return to this plan once every year, because if you do, you will be many steps ahead of the majority. With so many free online guides on how to invest, save money, plan a budget and pay off your debt, nothing can stop you. But, if your finances are not in order, you need to get them in order today, and if they are, remember the steps you did to get them there, and nothing will be able to stop you.