How close of an eye do you keep on your personal finance? Do you get to the end of the month before you realize you’re basically out of money? Do you make a budget every month — and do you stick to it? How are your investments and retirement coming along? If so, it’s time to start a finance organization overhaul. Here are some good reasons why you should be tracking your finances — no matter how much or how little money you make. With a little planning, you can have great control over your financial life.
1. Avoid Debt
Not keeping a close eye on your finances can lead to willy-nilly spending and pretty significant debt. Things may seem manageable as you float along without much care about your financial situation, but that loss of control always comes back to bite you.
2. Save for Retirement
Keeping a good eye on your financial life usually means you’re saving more for the future. This may mean building a savings account and / or making investments toward your retirement. If you go long stretches without saving or taking an active role in your retirement, you might face some unpleasant surprises when you finally do take a look.
3. Living Paycheck to Paycheck
Paycheck to paycheck living is no way to handle your finances. If this is your idea of a financial plan, things can quickly get out of control — and your certainly won’t be able to get ahead. The only way to avoid living from paycheck to paycheck is to develop a realistic budget and stick to it. You need to track your spending and make cuts (like that unused gym membership) when necessary.
4. Reduce Stress
It’s no secret that financial issues can raise your stress level significantly, to the point that it puts a lot of pressure on you at work, in your family, and in your marriage. Tracking your finances closely might seem like a stressful task on the surface, but it will actually help you avoid stressful situations like huge credit card bills, collection calls, and bankruptcy.