Organizing your finances is a big undertaking. Here are three easy tips to get your finances in order to prepare for homeownership.
Plan and Direct: Tell your money where to go with a zero-based budget. Zero-based means that you have accounted for each dollar. Your budgeted items subtracted from your income should equal zero. There are many forms and templates available to help you keep a budget. The key is to plan your budget and map out where your money will go the month before you earn it.
If you have never done a budget before, your first few months will be trial and error. You will allocate too much for one category and not enough for another. Make adjustments each month and ensure that you are balanced (income – budgeted items = zero).
Following a zero-based budget is a good way to keep your spending in check. You will spend less money on superfluous items and will have more to put into savings or toward debt reduction. It will also help you feel more confident and secure about your financial future!
Reduce Credit Clutter: A professional organizer’s least favorite word is clutter. Too many open accounts can be too much to manage and may even hurt your credit score. If you are serious about organizing your finances, you should focus on eliminating financial clutter.
Take an inventory of all of the credit cards and loans you have open. If you have too many with balances, consider consolidating them. When one missed payment can hurt your credit score, it is important to stay on top of your accounts.
TIP: do not close accounts that have a $0 balance as your credit score considers the amount of credit used vs. the credit available. Closing accounts could lower your credit score.
Use technology: There are many ways to keep your finances organized using technology. Verity has a robust Online Banking system and a mobile app to help you pay bills, transfer funds and check balances on the go. There are also many online tools that can help you create budgets, track your spending and more.
There are many more ways that you can keep your finances organized but these three tips are a great start. Getting your finances in order is important because it reduces stress and puts you on the path to financial freedom. Learn more about financial education at veritycu.com/coaching.
Hi, I’m Kira. I joined Verity in early 2012 after a seven-year stint as a newspaper reporter. While I never thought my career path would veer off in this direction, I am loving my time at Verity. I recently moved from being a member services representative at the Alderwood Branch to being the marketing coordinator for the credit union.
I’m originally from Texas, but I have lived all over the country and the world, including Boston, Massachusetts, Anchorage, Alaska and Sydney, Australia. But in all my travels, the Pacific Northwest is the only place that has felt like home.
When not at work, I am usually home with playing with my son, husband, dog and three cats. During the rare times I don’t have a to-do list to plow through (and it’s not raining too hard), I can be found digging in the vegetable garden, training for a half-marathon, or grilling in the backyard.