If you are struggling to handle your finances, you may have considered hiring a financial planner. While they can be extremely helpful, it is possible to save a lot of money by sorting out your finances yourself. It may seem like an impossible task, but once you gain a little understanding of what is included in financial planning, you will realize that it isn’t as difficult as you thought it would be!
Starting Out With the Basics
In order to plan anything, you need to first understand what your finances actually look like at the moment. This means that you need to make a note of:
1. Yours and your partners (if applicable) salary
2. The debts that you currently have
3. The amount of money you spend each month (include groceries, fuel, travel costs, clothes/entertainment and basically anything that you spend money on).
Once you have your list for the month, you can work out how much money you have left. Take the cost of your monthly outgoings away from your salary and that will tell you how much you currently have left each month. Don’t be surprised if the number comes back negative. Often people who are in debt will have more money going out than they have coming in.
It is vital that you have a good idea of what you are spending and what outgoings you currently have. Once you know what you have coming in as well as out, you can then start to plan to make your situation better.
It isn’t difficult to make changes in order to improve your financial situation. First look at your monthly spending habits. Do you spend money on meals out or do you over indulge on your grocery shopping? Is there anything that you can cut back on? You may be surprised to find that by cutting back on a few basic things, you can save quite a lot of money by the end of the month! This money can then be spent on any debts that you owe.
If you have any savings it would also be a good idea to think about using the money to pay off your debts. That way you may not have any savings left, but you will also know that all money you receive will be yours and yours alone. Living debt free with little to no savings is much easier and less stressful than living with savings and a mountain of debt!
Overall you don’t need to pay a financial planner hundreds of dollars to be told something you can find out for yourself. Of course, in some situations financial planning is the only option available to many people. However, if you can do it yourself then you could save yourself a lot of money!