Good financial management is not just important for businesses; it is important for individuals and households, as well. And even though monitoring spending, paying bills, and following budgets are not widely seen as fun, they are important for staying out of debt and building wealth. Looking to improve personal financial management? Consider some of the most important habits of good personal bookkeepers:
Putting off financial management tasks, like paying bills and balancing checkbooks, does not reduce the amount of time those chores take—it increases it. It also adds stress, headaches, and potentially costly fees when personal bookkeeping is put off for too long. Setting aside a dedicated time each week for paying bills and each month for reconciling accounts and reviewing financial statements will keep personal finances balanced and accurate, and it will also make eventual tax preparation much simpler.
No one likes budgeting and having to restrict spending to limited categorical amounts, but it is an important element to good personal financial management. Good budgets have some built-in flexibility, since life is often unpredictable, but they require general adherence so that you are able to simultaneously keep up with necessary bills, pay down debt, and build a savings. Trying to accomplish all three of those at once is challenging, but a budget lays out how it is possible when each spending category is planned for.
Late payments incur additional fees and eventually may impact your credit. People with good personal bookkeeping habits tend to know how many creditors they have and when each of those payments are due so that they are never caught off-guard by a large, imminently due payment. Online software for managing bills and personal budgets are widely available to help make personal bookkeeping easier if you find your are falling habitually behind in payments.
Automating tools for financial management are not only for businesses. Personal budgeting apps, as well as software products that allow users to scan and upload receipts, import data, and manage multiple financial accounts are widely available and popular with people who prefer to stay organized through their devices. Online check printing is an affordable tool that can be used by individuals as well as businesses to print and mail checks on demand. Checkeeper integrates with many other bookkeeping tools, or it can work as a stand-alone service for individuals and households; all checks created through Checkeeper are stored automatically in a secure, online registry for later reconciling, expense tracking, tax prep, and on-demand exporting.
It is easier to manage spending if you know, at any given moment, how much cash you have in your accounts. Failure to record expenditures keeps you guessing about your balance and eventually allows you to become overdrawn on your account. While you can typically get a balance though your mobile or online banking app, you should also have an idea of how that balance was arrived at. Balancing your own checkbook equips you with an accurate, real-time picture of your finances and prevents you from wondering why your online balance is lower than you expected. If you use online check printing through Checkeeper, you have 24/7 access to your online check registry which contains transaction details of every check created through the software and can be searched by any check field.
Most people use multiple payment options, which makes financial management a more challenging act that involves multiple transactors, online platforms, credit cards, and bank accounts. Those who use multiple payment options and online wallets can stay better organized by taking a little time each month to review all the spending through each and syncing all the numbers so that incoming and outgoing money are always accounted for.
The most effective budgets for household and individual use have categories for both essential and nonessential spending. When trying to rein in spending, it is helpful to know how much you are allotting each month to luxuries you can live without. Consolidating entertainment extras and cutting out items and services that are underused can add up to substantial savings over time. Good budgeters and bookkeepers know which items are expendable and how to eliminate or replace them more affordably.
People with good money management skills know the value of saving. While it seems difficult or impossible to build a savings while also paying down debt and staying up-to-date on current bills, even a small amount of dedicated savings each month can add up over time to a meaningful amount. Money reallocated from a canceled budget category, as well as money from a company or tax refund check, can be used to start and build a savings. Having both short-term and long-term savings goals incentivizes savings and then rewards you when those goals are met. Allocating a budget category specifically to savings reminds you to stay diligent each month and helps prevent the temptation to redirect the money to something more transitory.