"Organizing Personal Finances"

Organizing personal finances can really give you peace of mind! It is also the first step towards financial freedom.

To begin with, look closely at your current financial situation.

This can be quite difficult. A lot of us prefer not to know exactly what is going on with our accounts.

But to get anywhere, you have to know where you are and where you want to go to.

This is also true for your financial situation.

Without knowing exactly where you stand you cannot move forward.

• Your credit card statements
• Your cheque book
• your mortgage
• your car payments
• Outstanding amounts on store cards
• Any other amounts you owe

Then add it all up!

I know this can be very painful, but you have to know where you stand if you want to improve your financial situation and maybe one day have financial freedom.

That was the first step in organizing personal finances.

Next, list everything that you own:

• money on savings or other accounts
• unit trusts or other bonds you might have
• your incoming salary or commissions
• money that is owed to you
• your house
• your car
• monetary value of all the other things you own

Be realistic with this last point and only write down what you would get if you would sell the things now.

Then compare the two. Distracting the higher amount from the lower one will give you your net worth. Hopefully it will be in the black!

But if not, at least now you have a good chance to get out of your financial mess and keep your personal finances organized.

Step two in organizing personal finances is done!


The next step towards financial freedom is getting clarity on what and how you spent.

To do that, I would suggest that you write down everything you spent, every day!

I know it sounds like a lot of work, but you will get used to it quickly and it is one of the most helpfull tools I know.

Carry a small notebook with you, or collect receipts for everything you buy.

Then add it daily into an Excel spreadsheet, sorted into broad categories like food, rent, clothing, fuel etc.

At the end of the month, add up how much you have spent. It might surprise you!
A good thing with doing it in Excel is that you can use the programme to add up the different categories, which will give you a very clear idea how much you spent on what.

Keep doing that for at least three months and complete step three in organizing personal finance!

I have been doing it now for over three years and it gives me great peace of mind to know exactly were I stand financially, if I can splurge or if it is better to be careful with what I spent.

Once you have started doing this you also have to set up a budget.

See Household Budget Sheet for more information.

And if you have problems with organizing your bills, check out this link.


Then sit down and think about your financial goals.

Would you like to retire with 40?

How much money do you want to have when you retire?

Are there any big things you would like to own or do, like buying a house, replacing your car, paying for your kids education, going on an exotic holiday?

Make three financial plans:

• a long term one (10 - 15 years from now, where do you want to stand financially?)
• a medium term one (3 - 5 years from now)
• and a short term one (next year).

Also discuss with your partner and family what their priorities are.


Once you know where you want to go and what is important to you, not spending all your money now on short term gratification will be a lot easier to do!



And if you want to earn more, check out Ideas to make Money

That was the last step in organizing personal finances.

Now enjoy the freedom that comes with being financially sound and organized!



Return from Organizing personal finances to Organized Living Solutions