5 Simple Tips for Organizing Your Finances in 2024

5-minute read | Updated Jan 16, 2023.

The struggle to keep a decent and organized financial life is challenging for most people. You may struggle with your personal finances or paying your monthly bills; and worst still, you might lose sight and be unable to identify areas where you spent most of the money.

Others might manage their financial obligations, but don't find the time to keep track of their budget monthly.

Fortunately, some strategies can help you organize your finances, build good spending habits and manage your monthly expenses. Lacking organization is as detrimental as having limited money for your bill payments.

In this article, you'll learn 5 simple tips for organizing your finances.

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#1. Set up a monthly budget

One of the most effective ways to achieve your savings goals is to set up a monthly budget. With a good budgeting method, you know how much you need for your bill payments and debt payments.

Discretionary spending is the hardest to keep track of, especially if you pay with cash a lot instead of using a debit card; a budget will bring discipline to your personal finance.

Keeping track of your financial house is easier with budget templates. You can get two here.  

To establish your budget, start with your monthly income. If you're a freelancer or have fluctuating paychecks, use your annual average which you divide by 12 to get a monthly median.

Then list all your bills and expenses, including the recurring bills. It might be easier to get your checking account paper statements or any other financial documents, or else you can view bills online. Keep them all together in a folder at home or go with a digital filing system.

You can use different budgeting rules to allocate money to your expenses. These two are popular regardless of your financial goals:

The 50/30/20 budget rule

This breaks your monthly income into three categories:

●      50% allocated to your essential expenses

Also called necessities, you pay bills such as rent, food, the electric bill, tax returns, etc...

●      30% allowed for discretionary spending

All the things that you would like to have but don't necessarily need. This could include eating out, going on holidays, clothes, entertainment, etc...

●     20% reserved for saving, investing, and paying off debt

This is probably the most important category because savings and debt freedom are critical to financial independence. A smart way to save is to make an automatic direct deposit to your investment accounts.

Full article here The 50/30/20 Rule: How to Budget your Money more Efficiently

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Zero-based budget rule

Although this method was initially developed for companies, it can be applied to your own financial goals. In zero-based budgeting, you start your budget at zero each month and need to justify every spend, before allowing it into your budget.

Zero-based budgeting is good for instilling financial discipline as it helps you avoid overspending and making careless financial decisions.

#2. Automate bill payments

If you find it hard to pay bills as there's no money left, then automating bill paying becomes necessary. When you have too many bills past their due dates, it can cause financial confusion and make it hard to have spending organized.

Bill paying automation ensures that all invoices are paid in due time without stress, and helps your credit report as you won't have a late payment.

Most suppliers will have an online service to set up automatic payment. You need to be organized with your finances to avoid a bank overdraft.

#3. Track your expenditure

You'd be surprised how many people look at their bank or credit card statements each month, wondering where their money is going. If this sounds familiar, you need to start tracking your expenditures. It is one of the effective strategies to control your finances, manage your spending, and identify where your money is going.

You can use various tools and free budgeting apps to effortlessly track your bills and expenses.

Alternatively, Microsoft Excel can be used as a good expense tracker as it has built-in templates and formulas that simplify the tracking process.

#4. Use separate bank accounts for easier money organizing

Using the same bank account for all your expenses can make it harder to organize your finances.

Separating your primary needs and monthly utility bills from your non-essential payments may help you stay in control of your spending. When you receive a paycheck each month, split the money into these accounts.

If it's easier, you could use the cash envelope system if you don't want to create more than one account. The envelope system is a budgeting tool where you organize physical cash into different expense categories in separate envelopes.

If you've put $75 in the ''entertainment envelope'' for the month, once you've spent it, that's it, you can't spend any more in this category until the following period. You may still have to adjust it sometimes, with higher electrical bills for example.

This method forces discipline with each bill payment or any expense, helping you spring-clean your finances.

#5. Manage your debts

No matter your financial status, debts are inevitable. However, if not well managed, they can haunt you and hinder your financial progress.

To manage your debts, start by listing them including your credit card, mortgages, student loan, and other personal loans. Note down for each one the necessary details such as the exact balance outstanding, interest rate, the due date, and the minimum payment.

You can either start with the one with the smallest balance or pay off the loan with the highest interest rate. However, it's good to focus on clearing off one debt at a time, making it one achievable task after the other. As always, when it becomes overwhelming to organize bills, or if you need guidance to understand credit card interest, consult a financial advisor.

Final words for an organized financial life

You can combat the challenge of living from paycheck to paycheck by adopting effective strategies toward organized finances. This will help you define your money goals, lead a financially decent life, and build good money habits. A little spring cleaning with your bills may be on the horizon!

Get your finances in order. We’ve done the research to find the best companies and personal finance toolkits around.

 Contributor: Vick Sani

No Financial Advice. This article does not provide financial advice and has been prepared without taking into account any person’s investment objectives, financial situation, risk tolerance, or particular needs. 

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