Managing your Personal Finance

angie By angie, 16th Aug 2011 | Follow this author | RSS Feed
Posted in Wikinut>Business>Accounting & Finance

Does the thought of organizing you finances frustrate you? Does it seem like an impossible task? I know the feeling. Managing your personal finances is very important, though. Simple things, like late fees and interest on credit cards, add up and can put a significant dent in your savings. This could result in unnecessary financial pressure. Regardless, of whether you are a college student, professional, home-maker or retiree good personal financial management is necessary.

Credit Cards

I’ve come up with a few starting points. First, collect all your credit card statements, check books, utility and miscellaneous bills, account statements, and CD certificates. Next, create a financial planner, a simple notebook should suffice. Keep it in a safe place, preferably with your tax papers and other documents.

They are easy to use and often we tend to make impulse buys using them. So, first question, how many credit cards do you have? Try categorizing your credit cards. Check the cards that are not being used and cancel them, you will save on card fees. Next, of the cards you have, which have you maxed or nearly maxed out, keep those separately. Last, the remaining cards you have, decide which ones you need, and which ones you can pay off and cancel.

Try to minimize the cards you have, this way it’s easier to keep track and you don’t have to pay any additional fees. It’s better to have one MasterCard, a VISA card, and another spare emergency card. If, you have any cards that you use often, for essential purposes, like cards that give discounts for books clothing or groceries, keep those. But, try to limit the number.

Next, look at the interest accumulating on the cards you have maxed or nearly maxed. Credit card interest rates can go extremely high, if you have missed a payment, or have a balance for more than a few months. The policy is normally about 55 day’s interest free, but this varies. Try to find out what the, interest rate on each of these cards are. Check your statements for the balances and minimum payment for each card. Write this information down in a financial planner. Don’t include the whole card number, just the last 4 digits, type of card, interest rate , balance , minimum payment amount and date. Do this for all the cards, you have. With this list you can slowly begin to organize your credit cards. It may take six months, a year or longer, but if you stick to this plan, you can seriously cut down on interest charges.

If you shop online, try using vendors that have the Bill Me Later option. The website It gives you a longer time to make your payments, and decreases the chance of interest charges building up.

Bank Accounts

If you have accounts in more than one bank, choose the bank that you have the longest relationship with. Or the one that you have your credit cards, mortgages, student loans etc. Then consolidate all the funds into a single bank.

If you have more than two checking accounts, consolidate everything into two accounts, one for monthly use and another with your emergency fund. In the emergency fund, account try to keep at least $500, if you do dip into it, replace the money, as soon as possible. For any checking account a bank will charge fees, such as withdrawal fees, ATM charges etc. Check these, if you are making frequent withdrawals see which option is cheaper, ATM or direct withdrawal. Next, try to limit your withdrawals to twice a week, unless it’s absolutely necessary. Look into any other fee’s they are charging that you could avoid. Also, some banks charge you for the ATM card use yearly, by consolidating accounts you can save on this as well.

Online Banking

Most banks have online banking and it is usually free. Use this service to settle all your utility bills, credit card minimum payments, student loans, mortgage payments, etc. In your financial planner, note the dates and amounts for these payments. Aside from some utility bills, the other payments should have a fixed amount. Try to pay these bills, before they become due through online banking. That way you can avoid late fees and interest. You can use online banking on weekends. So you can settle your bills, from home, on a Saturday morning. It’s easy and convenient. If you use a credit card for grocery shopping you can settle the balance weekly. If you use a check book, try to use the online banking option for as many payments as you can. For the rest, keep track of the payments made, in your financial planner. Also, try to only have one check book; it’s easier to keep track of payments that way.

CD’s and Fixed Deposits

If you have any CD’s or fixed deposits, keep a list of the amounts, interest rates, maturity dates in your financial planner. Don’t include the complete certificate numbers, just the last 3 digits is fine. If you consolidate your funds, into one or two CD’s you are likely to get a higher interest rate.

Putting It All Together

At the end, of the month, list all the bills you have paid, add the amounts. This will give you an idea of your expenses, and how and when you can start your savings plan. This is a basic round – up of your personal finances.

Take your time; you needn’t make the changes drastically, for one week organize your credit cards. The next week, consolidate your accounts and keep track of your withdrawals. Finally, set-up your internet banking system . These simple changes can help you start organizing your personal finances and begin the next step of Budgeting and Saving.


Bank Account, Bank Charges, Credit Card, Finance, Manage, Money, Payment, Personal, Save

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author avatar Funom Makama
15th Oct 2011 (#)

Accounting and finance has always been serious business and you have given me great thoughts in this article. Thanks a lot for the share and it was really a useful information.

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