Keeping good financial records is often a necessary step if you want to make sound money decisions and avoid financial challenges. Tracking purchases and saving for financial goals may be positive long-term outcomes of keeping up with your records on a regular basis. If you want to maintain solid financial records, you can implement a number of strategies.
If you don't have one, you don't want to hear it. But a budget is crucial to financial stability, and it's a key part of keeping good financial records. Sit down with all your bills and your bank statement and credit-card statements and makes lists of what you pay out and what you bring in each week or month. (Monthly budgeting is more common, unless you have few monthly expenses.) Organize these by date so you can easily tell what is due when. Obviously some things are harder to predict-for instance, a self-employed or commissioned worker may not have a set amount coming in each week or month. Estimate as best you can so you're providing some level of structure to your financial records.
Of course, income is easy to keep track of because it usually arrives right on time every week, every other week or every month. Bills are fairly simple to plug into your budget, too. Past records (often available from the various utilities if you haven't kept them yourself) can show what your electric/gas bill runs each month, what your car and insurance payments are, and the minimums on your credit cards. Ideally, your budget will allow you to add an amount to credit-card minimums each month-as little as $10 or $25, as much as $100 to $500 or more-so you pay down debt faster.
The hard part is tracking your fluctuating expenses:
Keeping your receipts for a couple of months will help you get an idea of the average amount you're paying for these items. Then you can plug these amounts in to your budget. If you've been having trouble paying your bills or saving money each month, you'll probably notice that you're cutting it too close with these "extra" items. Based on your need and personal or family priorities, pare back to numbers that fit in your budget (and allow you to save, too), and allow yourself only to spend that set amount.
Keeping good financial records doesn't mean you need to track every penny for the rest of your life. But you should be diligent enough that tracking overall expenditures becomes enough of a habit to keep you within your budgeted amounts.
A variety of tools can help you keep good financial records. Financial management software packages often can link with financial websites (from banks to investment sites) so you can get easy access to your data. Many people love this technology because it saves them from having to input everything manually. (Others prefer to use pencil and paper, and that's OK, too. Choose the method that works best with your lifestyle and personality.)
Various websites and smartphone apps also are specifically designed for money management and can enhance the process of keeping good financial records. You can use these features to track your transactions, check balances and make decisions in a variety of places through the use of consumer-oriented financial technology.
By choosing the right tracking tools, and by setting up a system for maintaining your bills and tracking your expenses and income, you'll be well on the way to keeping good financial records.
When you're in debt and living paycheck to paycheck, the idea of investing seems completely out of reach. Just keeping the bills paid on time and not sinking further into debt can be very difficult.
With all of the financial changes that go along with raising a young family, you may feel like you'll never get to retirement. Though it may be far off, evaluating your retirement saving plan and making some important adjustments can help ensure that you have a comfortable future. Here are some tips to help you assess your finances and look ahead to retirement.