Americans have the best of intentions when it comes to managing personal finances, but few are actually taking the time to focus on how they’re spending their money.
According to a survey conducted for the Northwestern Mutual’s 2019 Planning and Progress Study, nearly 50% of survey respondents said having a financial plan for the future is their definition of success. Survey respondents ranked “being financially prepared for the future” as No. 4 behind spending quality time with family, being healthy and having a good relationship with their spouse or partner.
That sounds great —- until you realize exactly how much time many of those same Americans are spending on their finances. A report about Northwestern’s study compared Americans’ interest in being financially sound to how they actually spend their time, according to the Bureau of Labor Statistics’ American Time Use Survey. It found that while nearly half of Americans want to have enough money to take them into their golden years, only 3% of them are spending time on household financial management on any given day.
That’s not encouraging news. For those with mounting debt or dreams of homeownership or an easy retirement, not keeping careful check of your finances is an easy way for spending to spiral out of control.
Managing Personal Finances – 5 Tips for Success
Here’s the good news: It doesn’t take long to track your spending daily and ensure you’re on top of your finances. Here are the five things you should do daily or, even just weekly or monthly, to ensure that you’re financially ready for the future.
Create and Follow a Budget
Once you have a budget in place, don’t forget about it. Each time you head to the store or click buy on that online purchase, be mindful of how the expense fits in with your overall budget and savings goals.
Monitor Your Spending
It’s easy for little things to get out of hand. Buying lunch out one day turns into every day. A trip to the mall to purchase a new shirt for an interview turns into buying an entire wardrobe as if you already have the job. Personal finance apps can make it easier to track your spending on the fly, uncover new ways to save and set up savings goals.
Talk Money With Your Partner
Research proves that there are plenty of benefits when couples talk about money. When they have those regular conversations about managing personal finances, couples are more likely to sync their spending. As a result, studies show, they are happier together and more likely to stay together for the long haul. If you have a spouse or significant other, it’s important that you’re both on the same page about saving and spending. Together, with regular conversations, you can be accountable to each other to ensure you meet all your life goals.
Keep Tabs On Accounts
Data breaches and identity theft are increasingly common. Thankfully, it’s easy to check in on your bank accounts and monitor your credit reports to ensure fraudsters aren’t taking advantage of you. The Federal Trade Commission offers tips and tricks to protect yourself against identity theft.
Consider Your Savings
As you make decisions about how to spend your money, don’t forget about ways to save it too. According to the federal Financial Literacy and Education Commission, people who monitor their savings actually sock away more money simply because it’s on their minds. So, as you manage personal finances on a more regular basis, keep all your goals front and center.
The team at CESI is committed to helping you make wise financial decisions and to helping you understand how to get out and stay out of debt. For a free debt analysis, contact us and find out how we can help.
