Tax Season is Over: Organize your Finances (and Stop Wasting Money!)
If you were digging through a shoe box full of receipts during the tax season scrambling to meet the April 15 deadline, you may be thinking that this is the year to finally organize your finances. We couldn’t agree more! Organizing your finances can save you money and keep next year’s tax deadline from being such a day of gloom. You can organize your finances in five easy steps:
Record Your Expenditures and Income
You cannot take control of your finances until you know what you’re spending and where. Write down all of your income and all of your debts, including expenses like fuel, food and incidentals that are sometimes forgotten. To truly get a picture of where your money is going, keep track of the small expenditures you make each day on things like coffee on the way to work and lunches out.
Identify Places You Can Save
Once you see everything in black and white, it is easy to see where you can cut expenses. Whether you have too much credit card debt that you need to prioritize or spend too much on lattes each month, once you see where the expenses are, you can set goals to curtail spending. Instead of grabbing a latte on the way to work, bring coffee with you. Instead of paying only the minimum due on your credit cards, make a plan to pay off credit cards by identifying the one with the highest interest and paying as much extra toward the balance as possible each month.
Set Savings Goals
It’s a good idea to have enough money in savings to cover three to six months of bills. Even if you can only afford to save $25 each month, start setting aside what you can to build up your savings and create a financial cushion between you and the unexpected.
Find Creative Ways to Save Money
From choosing credit cards with lower interest rates to finding a bank that offers free checking, there are a number of ways you can save money. One of the best ways to save money on the groceries and other items you need is by using coupons. Careful shopping for larger purchases can also save you money; don’t be afraid to compare prices — and don’t fall prey to high pressure sales tactics that convince you to buy something before you can afford it.
Track Monthly Expenses and Keep Organized Records
Before you know it, tax season will be here again. Make your next tax preparation easier by recording your expenses and income on a monthly basis, using financial software, an online service like mint.com, or a spreadsheet program to record your data.