Are you in Control of your Finances? 5 Questions to ask Yourself
Spending money is easy to do, particularly when the funds aren’t actually in the best state to be spending them in the first place. By asking yourself these simple questions, you will be on the right path to financial security and even realise you may not be drowning in debt as quickly as you thought – in fact, you may not be drowning at all.
1. How many Bank Accounts do you have?
Having multiple bank accounts is the quickest way to get out of control with your money, as you’ll constantly be chasing up where every cent is. Making the conscious decision to compare bank accounts and chose one or two, such as a Day2Day Plus or WebSavings bank account from BOQ could be just what you need to consolidate your finances.
2. Are you Living on Credit?
Ask yourself this – are you living on your money or the banks? Credit cards are great – and can be lots of fun – but they should not be a substitute for your own money. Start thinking of the credit card as rainy day or emergency only money, and budget your actual pay around your expenses. If expenses exceed your pay, then you are spending too much and living above your means. Look at cutting back.
3. What are your Current Debts like?
A lot of people understand they owe money for credit cards and car loans, but not what the specific amount is, what interest charges are added, and how long – or if ever – it will take to pay them off. Taking a new perspective is important; for example, instead of looking at your credit card in terms of how much you’ve got left to spend, look at how much you owe and work out a payment plan from there. You don’t want to be just paying the interest off.
4. Are you Spending Money on Things that Actually Matter?
Everything counts, and most of the time the items money is spent on are not even close to being essential. This is why budgets are important. And if there is anything left over after the essentials are gone, try to put some in savings, that way you can treat yourself every now and then – rather than every day – and you’ll feel more secure knowing that additional money is there if you need it.
5. What would you do in a Financial Emergency?
What would you do if you got sick suddenly? What if your fridge imploded? What if you got fired? Having an emergency fund should be a vital goal for anyone trying to become more financially able. Stressing about money happens to everyone, but by setting up a financial cushion you will take some of that burden away and feel financially freer instantly!
Money is something that affects everyone, every day of their lives. Feeling out of control when it comes to this basic necessity can affect you both physically and mentally. Reassess your life and finances constantly so you always stay ahead, and are therefore better equipped to deal with problems if they arise.
Do you feel in control of your finances? What are some of the best ways you’ve found financial freedom? Write your comments in the box below.