23 Aug 5 Useful Tips To Getting Your Finances In Order
The Ultimate Guide To Getting Your Finances In Order
The thought of getting our finances in order can sometimes be a daunting task and a task some of us never seem to get to. If you truly want to achieve a fruitful and financially free life, it takes commitment, dedication, discipline and a good old fashioned dose of patience.
So here are a few tips to help you get started!
Get A Good Accountant
Getting a good accountant will save you time, so you can focus your energy on developing the core elements of your business. Having an accountant will help you complete statutory documents correctly, assist you meet key deadlines and offer you financial advice that will enable your business to grow.
A good accountant will also save you money! Filling in forms incorrectly, or not clearly understanding SARS and labour legislation, could result in hefty penalties and fines. Talk about an unwanted and unnecessary dent in your profits!
An accountant will help you mitigate your tax bill by taking advantage of any legal benefits that are available to your business.
Developing a good relationship with your accountant is a valuable one! They know your business almost as well as you do and have the benefit of taking an objective perspective. Their advise will help you to make sound judgements that will grow your business, especially when you are inevitably so emotionally invested in your business.
Investing in an accountant will also help you identify and fix financial problems before they get out of control.
Set A Budget and Live By It
It can be tempting to live beyond your means at times, but you have to be realistic in your spending to avoid the accumulation of unwanted and burdensome debt.
Budgeting is not just smart business but essential to map out and help you navigate your path to financial freedom. A realistic budget will help you develop discipline in your finances and make your financial goals a reality. You will be grateful for it later!
Start by calculating your expenses to determine how much you are spending each month, use bank statements and receipts to help you. Be thorough in calculating your expenses as this will help you set a realistic budget plan. The next step is to determine your income, add your salary and any other source of income you may have.
Once you have done that, you need to determine realistic savings and debt pay off goals. Start by subtracting your monthly expenses from your income; this is to determine if you have a budget shortfall or surplus. You should not be spending more than you are making. Use this opportunity to see where you can cut out unnecessary expenses and add the funds into savings. You should aim to save at least 10-20% of your income.
Keeping track of all your expenses and income will cause you to think twice before you make a reckless splurge and keep you motivated to reach your saving goals!
Calculated Debt Can Enable Growth
I know it sounds odd, but you do need some debt. Financial institutions need to have access to your credit history to determine if you are a risky investment for them, especially if you want to buy a car or house.
Borrowing selectively to grow your business is often essential. Just make sure you are investing in growth, and not borrowing to cover your expenses. This is a death (debt) trap.
Manage Your Debt
You need to manage your debt well, pay more than the minimum payment due on any debt you have (credit cards, clothing accounts) this will improve your credit score and make lower interest rates available to you. Secondly, keep track of who you owe and how much you owe. Creating a monthly bill calendar can help you remember important debit order dates and payments. Life gets busy, so you need all the reminders you can get.
Submit Your Tax Returns
If you have a medical aid, retirement annuity or a travel allowance on your salary you are due a refund from SARS, but you must submit the return! Having an accountant to assist you with this is a good idea especially if you are unfamiliar with submitting tax returns, submitting a return on your own could result in you paying more taxes, so consult with a good accountant.
Managing finances may seem daunting at first, but as you diligently stick to your budget, grow in discipline and financial acumen, you will reap the financial rewards and stay motivated for bigger goals! It’s never too late to start. So start now.