Ultimate Trick To Achieve Financial Freedom Using Personal Finance Journaling
Right after you start earning, your major focus should be on efficiently managing your finances. This is because you do not want for yourself a life that keeps on squishing between paycheques. Also, you would never desire to be in a position where you don’t have any money set aside to help you through the rainy days.
This is why experts suggest everyone keep a check on their personal finance and work their way out with proper finance knowledge. At first, understanding the basics of expenditure, savings, and paying your taxes on a fixed income seems like a huge task. But, trust us when we say this, you will thank yourself later in life for all the hard work you did in managing your finances.
This is because managed personal finances come with unparalleled benefits. Among other things, financial management has the power of keeping your expenditure in control, manage your spending habits and bringing a balance between earning and spending, and help you save more than enough.
Keeping a check on your expenses and budgeting right with so many numbers to meddle with is not easy.
This is because you can get lost between expenses, forget where to spend how much, and fail to keep a track of your financial habits through several months.
Don’t worry, we have the perfect solution for all such issues. If you don’t want to put your memory (and your finances, of course) to a test but still want your money matters to be in their best form, you should give Personal finance journaling a chance.
Don’t how what it is all about? Don’t worry, read on and you will be introduced to everything about this cool life hack in the face of a journal.
What Is Personal Finance Journaling?
Well, while the term itself is quite self-explanatory, it is a bit relevant here to explore it further for a moment. You might have already guessed; personal finance journaling is about writing down your regular expenses and savings as well as other money matters systematically on a dedicated journal or notebook.
The idea itself has no proper definition since everyone indulging in finance journaling has different preferences about how they would go about it. Some like to type their finances and relevant matters out on an excel sheet, while others may simply prefer using a loose set of papers to doddle numbers over.
However, as far as our experience is concerned, a lazy attitude towards maintaining your financial records is rather damaging. Not organizing your book-keeping activity properly, you will eventually end up not investing your time in it at all.
Hence, we suggest you invest in a proper journal and make it a habit to record your financial matters in it every day. Taking out 10 to 15 minutes from your daily schedule, you can carelessly and record all that you did with your money that day. Also, the fact that you will be having a full-fledge journal to stay organized will keep you motivated enough to not be lazy about finance record-keeping at all.
Everything that you save in your journal will help you keep a note of where you are going in the wrong direction in terms of financial planning. You might be asking right now something like “but, do I still need to keep a personal finance journal if I can keep a check on my damaging expenditure habits without a journal?”
Well, yes! You need a personal finance journal no matter how good you think you are at money management without it. There are so many benefits to personal finance journaling that it seems rather more of a mistake to not have it with you in your adulthood.
As we already said, personal finance journaling comes with several unmatchable benefits that can help you gain financial freedom. Not just it is a way towards easily managing finances in your day-to-day life but can enhance your overall focus and understanding of personal finance management too.
Below, we are sharing some of the many benefits of personal finance journaling that you will yourself experience once you develop this habit of recording your finances in a systematic way.
Importance of Personal Finance Journaling
1- Clarifies You On Your Financial Goal Setting
The first step to right personal finance management is defining limits for yourself and setting clear goals – both in terms of savings and expenditures.
Interestingly, your finance journaling habit can help you define and set your goals clearly. Without a journal to write down all those aspects that can define an achievable goal for you, you are likely to find yourself in the middle of confusion.
However, with properly-made personal finance journals with specified columns to record everything, you get a fuller picture of your available money, your spending limits, and what portion of your expenditure you need to focus on to strive towards achieving your goals.
To sum up, we can say that a well-kept finance journal gives you a clear and cohesive visual map of all those financial aspects that can help you define a clearer and achievable goal.
2- Eases Financial Decision-Making
When it comes to personal finances, you have to take some risks and decide on a lot of things at each step. From where do you plan to take guidance whenever deciding on something big that can significantly affect your financial standing?
You will always find it hard to answer this question when you do not have any financial journal and record available. However, in the case of being an avid money journal user, we suggest you simply rely on it for all your decisions.
Like we said before, a financial journal will give you a wider picture of your finances. While you cannot realize it now, this wider picture with all the trends and patterns in your financial matters over the months can help you assess the results that any decision can have on your financial standing. Based on this assessment, you can decide whether or not a decision would benefit you and hence should be or should not be taken.
3- Ensures You Spend In Limits
Your financial journal can stop you from spending unnecessarily. With a properly managed journal, you have set limits to how much you should spend in a day or week. When you open your journal daily to record your stuff, you are reminded of your limits time and again. This regular reminder keeps you focused and ensures that you will not spend your money instantly on anything that you don’t need.
4- Lets You Track Your Progress
If you have some solid financial goals, you must be willing to step up your financial management game over time. A journal with stored records of all your previous months can help you assess your financial progress.
With everything pinned down in your finance journal, you can see where you progressed steadily, where you did good with your finances, and where you made no progress at all. With such track records available for comparison and analysis at hand, you can surely make your way to better financial management with every passing month.
5- Helps You Quickly See Your Mistakes
No matter how careful you are with your spending habits, there will surely be an impulsive moment every now and then in which you will cross your set budget and spend on something that is not needed.
While these are human errors and can be committed by anyone, not keeping a check on yourself can throw you far away from your financial goals. With a journal having all your record of extra expenses, you can easily find out your mistakes at the end of each month.
These figured-out mistakes then, when kept in mind, can help you commit lesser blunders next time and achieve your goals easily.
Achieving Financial Freedom With Personal Finance Journaling: Step-by-step personal Finance Guide
As a first-timer with no experience of using a finance journal, things can get pretty upsetting and confusing for you. Below is a step-by-step personal finance guide that can help you navigate your way through managing finance journaling for the first time:
Step 1: Define Your Goals
Somewhere at the start of this article, we told you how important it is to begin your personal finance journey by defining clear-cut goals for yourself. Hence, this one has to be the first step in your efforts to achieving financial independence with a finance journal.
Sit down and take as much time as you want to set some realistic, yet a bit challenging, saving and expenditure goals for yourself for a month. Now, take a piece of paper (no, not the journal for now) and write down your goals clearly on it.
Step 2: Make A Rough Budget
Before you start filling in the sheets in your journal, it is better to write down your budget roughly. This helps you have a clear idea of what is your net income, where you will be spending your money, and what are those places where savings are possible.
Step 3: Get Your Personal Finance Journal
You can find several finance management journals in the market. Just go through some options and find the one that is most comprehensive and comes with enough space for you to put in extra information.
Any journal that comes with specified layouts and sections for you to clearly and separately write down your goals, expenses, savings, and other thoughts is usually the best thing you can get for personal finance journaling.
Step 4: Think About How You Will Manage Your Journal
No, you cannot start filling in sheets the very moment you get your hands on the journal. Rather, take some time and think of how do you want to fill in the spaces in your journal. Do you want to put in details? Are you okay with stating information in brief bullets?
Also, you may want to decide on different pen types and colors that you can use to fill in specific information. This makes your journaling journey both captivating and clearly understandable.
Step 5: Use Your Journal, Regularly
Now that everything is quite clear, you can start filling in your journal and do so regularly with a proper routine. Make sure you think twice before filling in every column so you don’t make a lot of mistakes and end up with a page having a lot of stuff written over it.
Don’t worry about time issues, filling in a single page does not take more than 10-15 minutes from your day.
Important Personal Finance Tips To Help You Gain Financial Freedom
All of this seems overwhelming, right?
Don’t worry. Below are some of our favorite personal finance tips that can make your journey easier and you will surely experience a lot of betterment in your record-keeping too:
- Don’t let your anxiety or fears take control of you
- Set short-term and realistic goals
- Consistently manage your finance journal
- Make it a habit to think twice before making a purchase that was not planned priorly
- Always save separately for life after retirement
- Never let a month go without saving anything
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All of this was just a fraction of the information that you need for successful personal finance journaling and management. If you have bigger financial goals set for yourself, we suggest you gain more knowledge of personal financing.
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