Do you ever feel like your finances have more control over you than you do over them? Perhaps they are more like an amorphous mass and you want to have better awareness of what is going on?
We all have finances, and our relationship with money is formed before we have any responsibility over it. As adults, we can consciously change this: you control your time, your actions and your financial future.
This article describes a proven 5-step guide to empower you to take control of your finances and meet your goals.
Step 1: Plan
What are you trying to achieve with your finances? This has to be personal to you. It could be a savings target for a house deposit, paying off debt or a turnover target for your business.
Once you know your goal, think about which numbers you need to see to know how well you’re doing against that. Usually balances are a good start – bank accounts, credit cards, mortgages, everything money debit or credit – so that you can see your total wealth in one place. You may also want to see income, spending in certain areas, or keep track of your expected tax bill. Knowledge is the first step to taking control!
Create your finance tracker – somewhere you can keep these numbers together – a spreadsheet is ideal. Some people get a bit excited at this point and try to track everything! Don’t give yourself more work than necessary; but make sure you capture everything you need.
Step 2: Maintain
For your finance tracker to be any good, you’ need to fill it in regularly. To do this as quickly and easily as possible, I suggest using 2 techniques: batching and scheduling.
Batching means doing one job repeatedly at one time rather than doing that job multiple times over the course of a week/month. A great example of this is biscuits. Imagine, every time you wanted a biscuit, you got out the mixing bowl and baked yourself one, single, biscuit. Seems like madness, right? We’re going to do the same with your finances. Once a week/month (whatever suits you), you do all your finance jobs, e.g. fill in your finance tracker, make sure your bank account transactions are right, invoicing, anything else you do.
Scheduling is putting this batch in the diary on repeat. Scheduling removes the worry about when you last did the job, when you’re going to find time to do it next and keeps you on target.
Step 3: Review your Progress
Now you have a lovely finance tracker showing how much money you have (or not), where, and what is changing month-to-month. Look at these numbers with your initial goal in mind:
- Are you getting nearer to your goal?
- What is/isn’t going well?
- Can you identify why things are/aren’t working?
Step 4: Alter Behaviour
Now you have firm evidence of the state of your finances and how they are doing against your goal. Use your answers to the questions in step 3 to guide what you’re going to do next. What are you going to change as a result of your financial situation knowledge? It might be that it’s all going great and you need to keep doing what you’re doing; or you may have noticed some things you can improve and decide to alter your behaviour to reach your goal.
For example, you might want to raise your prices, eat out less often, or move money automatically to a savings account.
Step 5: Forecast
The holy grail of organised finances: knowing the future and intercepting problems before they even happen. Not easy. Very powerful.
It might be that in a few of months you’re going on a hen party weekend as well as getting new windows – that’s going to be an expensive month! With forecasting, you can take financial control of this before you get there by cutting back on spending, finding extra work or encouraging early payment from clients by giving a small discount.
Take financial control
Use this 5-step guide to take control of your finances and lead your life to the financial goals of your dreams!
If you want to know more about organisation and productivity check out Bramley Business Solutions here: