Thursday, January 15, 2009

Organizing your Finances

One of Suze Orman tips that really struck me was:
Financial insecurity makes you vulnerable even to minor life events. Something as small as a broken boiler can send you into a spiral of debt for years to come. Having financial freedom means not having to worry about such things.
So true! In fact, failing to organize our finances is one of the leading causes of bankruptcy. Unpaid bills filing-up, small loans left unpaid, and unnecessary purchases clutter our personal finances that we oftentimes overlook until the demand letters from our creditors start arriving. We panic. Hence, we embrace the first debt consolidation proposal we receive without much thought.

Organizing your finances is in fact easy. It simply takes a little amount of discipline and will-power to do the most basic money management practices you know, like prioritize your needs over your wants in your purchases, lower your bills, spend less, and save more. This is organizing. You do not have to be a financial planner expert to do that. A few minutes of your time, a calculator, a pen and a notebook will do wonder, this will help you take those small steps to financial freedom.

Believe me, recession or not, the key to a happier life is an organized personal finances. Do yourself a favor, start today! This is no rocket science. In fact it is easier than you think, as Orman puts it:
Managing your finances is similar to organizing your house. It is easier to control you debt once you know exactly how much you owe and to whom.