Newsflash! You don't need an accounting degree in order to be an accountant. In fact, you should have a clear understanding of your own cash flow before hiring someone to handle your accounts for you. You should know off the top of your head how much money you have coming in each month, where it's coming from, how much you have going out, and where it's going. To me, those are pretty basic functions of accounting. One of the things that separates the rich from everyone else is that they make it a point to spend time managing their money. Your money is your business!
Here are a few tips on how to become your own accountant:
- Check your bank account everyday - With the number of identity thefts that occur each day, it is imperative that you verify your account activity.
- Set aside at least an hour a week to review cash flow - The rich spend hours reviewing their accounts and budgeting each week. You can develop that habit right where you are.
- Balance your checkbook - If you still write checks as I do, balance your checkbook to avoid overspending in the event that your checks don't clear within a day or two.
- Total all of your receipts each week - Keep track of how much you're spending outside of regular bills. It will help you plan and develop realistic budgets.
- Sign up with a free money management account - This will simply take a lot of the manual work off your hands. Just log on and the calculations will automatically update for you.
- Set a budget - Every business operates with a budget. You need to set a budget in order to measure your progress, as well as keep you on track.
- Compare monthly bills to catch potential errors - Mistakes happen. Make sure your bills are accurate each month to avoid overcharges, misapplied payments, etc.
- Review your credit reports each year - Again, mistakes happen and identities are stolen every day. Don't wait until you actually need to provide a credit report to check for inaccuracies, as it may take a couple of weeks before corrections are updated.
- Review your pay stubs each pay period - Check to make sure your deductions, hours worked, salary amount, etc. are accurate, especially if you've made changes recently.
Those are just a few ideas. The bottom line: handle your business! If you don't know or care about what your money is doing, then who will? Be proactive and take initiative. The sooner you detect any issues, the sooner you can resolve them. Don't rely solely on someone else to manage your money. Anyone other than yourself should be your assistant or an adviser. You don't know what you don't know, and you should definitely know your money!
Change requires action!