How to Manage your Money And Start Investing

Do you want to get your finances into shape for summer? Unfortunately, it's one of those chores everyone puts off, and some never get around to doing. The good news is that there are several easy strategies for making sense of a morass of unorganized data and information, and you can finally make a monthly budget that gets the job done.

Step one is to know where you stand. At Money & Mimosas, we call this the Money Clarity exercise. It involves making a master list of all your accounts.

The next steps include eliminating unnecessary monthly expenses, creating a savings plan you can stick to, setting aside funds each month for investing, and minimizing high-interest debt. The following suggestions can help you put a general financial plan in place.

List All Debts, Expenses, Assets, and Income Sources

You need to know what your current state of fiscal is. This is an easy, if dull, step, so be ready to sit down for about an hour and make a long list of all debts, income sources, recurring expenses, assets, and cookie jar money you might have stashed away. Categorize every entry to see what your monthly surplus or deficit is.

Regularly Invest a Fixed Percentage of Income

One of the essential components of a monthly budget is planning to invest. It can be in whatever amount you choose, so fractional real estate shares are wise for most working people. Those who want to retain as many investment gains as possible utilize tax-advantaged strategies like 401(k)'s and IRAs. However, while traditional accounts like those do allow for deferred taxation, they are only designed to hold assets like cash, stocks, and other highly liquid instruments. 

Fortunately, self-directed IRAs let you add non liquid components, like real estate, to build long-term wealth. Real estate has outperformed the indices like the S&P 500 for more than 20 years. That's just one reason people set up self-directed IRAs and add real estate shares to them. The initial step is to review a complete guide on the subject and see why these non-traditional retirement accounts are an excellent way to make real estate part of your long-term personal financial plan.

Automate Savings and Contribute to Retirement Accounts

Set up a payroll savings plan and earmark a fixed percentage of each check for a long-term savings account. The key to saving is to make the practice a painless habit, and automated plans like the ones offered by most employers and banks are the best way to get underway. Also, aim to contribute the maximum allowable amount to retirement accounts to take advantage of tax-deferred features of these types of plans.

Reduce Regular Expenses

Perhaps the oldest strategy for improving personal finances is to reduce everyday expenses like groceries, fuel, and discretionary spending. Joining a wholesale club can help average householders cut their grocery bills by as much as 30 percent annually. Plus, using public transportation regularly and making an effort only to use your car for essential trips can help chop a big chunk off monthly fuel purchases. Other money saving tactics include making weekly meal plans, eating at home more often, and avoiding fast food, convenience stores, and bars.