Five Reasons To Get Your Finances In Order

by Redeeming Riches on May 22, 2018

Earning, spending, and moving on without any foresight or hindsight is no way to live. Knowing where your money goes, where it shouldn’t go and how it gets there is essential to your financial wellbeing. If you’ve been pressed for time lately and haven’t gotten around to looking at your financials, it’s never too late to start.

While it isn’t completely necessary, it can prove beneficial to sit down with a financial advisor and look at your bank account to figure out what you can do with your money. You can end up saving tons, resulting in less stress and an increased standard of living. Your family will benefit and your children will have something to keep them going when you can no longer support them.

Knowing Where Your Money Goes

Take a look at your transaction history for the past month – or even just the past week. Chances are that you’ll be surprised to find a few records of expenditure that in hindsight were totally unnecessary. If you keep a record of where your money goes and figure out how you can save on certain items such as food and clothing, you’ll likely end up with a lot more money for what really matters.

Your Family’s Wellbeing

This goes much further than simply having the cash for Christmas gifts. Look at your insurance, medical aid, school fees, clothing and food that you spend on your family. There’s likely somewhere you can save without impacting their well-being. College is one of the most expensive costs on the list, so if your children are still young, consider opening up a savings account for when the dreaded day comes.

Increased Capital

It’s simple. If you have more money leftover at the end of each month, you can look at that money as capital that you can spend on a variety of expenses. This opens up the opportunity for you to consider investments that will improve your long-term financial situation, assuming you know where to invest, of course.

Knowing What Your Assets Are Worth

As much as the majority of your assets could be liquid and convertible into cash, many come with their own intricacies and clauses. This is why it’s important to know exactly what everything you own is really worth. It doesn’t matter whether you checked five years ago because the value of almost every item you have has likely changed by then, especially if it’s a car or house.

Unfortunately, only one of those things has likely increased in value. Whereas the others, unless you own a vintage Ferrari, has likely gone south. But without proper knowledge of the value of the items you own, you’d likely not know this and end up making a mistake.

More Savings To Put Towards What Really Matters

There’s nothing wrong with opening up an extra savings account for the occasional luxury item, but it is essential to look at what you actually need to save for first. Investments with high liquidity can be put aside and spent on the important things like education and medical bills. Knowing your finances means knowing how much you need to save for these needs.

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