“Do you know where your children are?” Even if you aren’t old enough to remember this famous TV slogan from the 60’s through the 80’s, the sentiment is easy to understand. It takes awareness to keep track of the important things in your life, and this includes your money. Without careful oversight, money tends to have a life of its own. Some people are slaves to their money, and to their spending habits. Many people fear taking a look at the balance of their checking account, because it might be low, empty, or overdrafted. In order to improve your financial status, you’ll have to keep careful track of your money. Here are three aspects of that process, as well as ways that it will improve your financial life
Keeping careful track of your money puts you in a great position to catch fraud before you are robbed blind. If your money is stolen – from your checking account, from your credit card, from your Paypal account – you can usually get it returned, if you catch it fast enough. If your money is stolen and you do not report it for days or weeks, your chances of getting your account restored are much slimmer. PPI claims history has borne this out. Payment protection insurance is a form of insurance that used to be sold to unwitting loan borrowers. Many of them didn’t notice the problem for months, because they didn’t regularly check their financial accounts for invalid charges. It would have been easier to recover the money, and less would have been taken, had they caught it sooner.
Another benefit of regularly checking the status of your financial accounts is understanding what you (and anyone else who has access to your accounts) spend(s). It’s easy to spend money without realizing it, or quickly forgetting it. If you are a budgeter, there is no real way to keep up with your goals without fastidious investigation of your spending history. With this knowledge, you’ll have a more accurate picture of how you actually spend, and what you need to work on. You are likely to notice lots of waste. All future financial planning starts with understanding how you actually spend.
Another reason to check your financial accounts frequently is to catch investment opportunities. Lots of people start investing, then forget to check the evolution of their investments for many years. While we don’t advocate for over-correcting your investments, you’ll miss out on interesting developments if you don’t check regularly. These include underpriced stocks/funds, and dividends that are sitting around doing nothing. You’d be surprised how many people have money they’ve forgotten about.
There are plenty of other reasons to keep close track of your financial life. Without close scrutiny, things will just “Happen” to you financially, without any control on your part. If you learn to track your finances on a daily basis, you’ll start to notice trends, and correct mistakes that you’ve been making for years. As this goes on, you’ll develop a much stronger financial life.
Knowing Where Your Money Goes in 2017
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