How Simple To-Do Lists Can Help You Manage Your Finances

With so many financial obligations nowadays it’s understandable if you can’t seem to stay on top of your finances. Fortunately, the simplest of tools can make the biggest difference even for complicated matters such as managing your expenditures.

A simple-to-do list can alleviate your budgeting concerns. Here are a couple you can try:

The To-Budget List

The budget list is straightforward: it’s an itemised list of obligations you need to plan for when you get your net income. The catch here is that you partition your net income to plan ahead for expected spending. So what happens in this list is you take note of everything you’re expecting to pay for a given period, and you figure out how much of your net income goes to which. For example:

• Loans and mortgages: 25%
• Credit card: 10%
• Utility bills: 15%
• Savings: 20%

This list is pretty general and vague, but you should still get the idea.

The To-Prioritise List

Setting priorities is one of the most significant facets of financial planning. Not all your expenditures are equal. Your snack money isn’t as important as the budget set aside to pay the mortgage and the utility bills, for instance. So you always need to ensure you got your priorities straight. Some of the most prioritised items in any to-do list include:

• [agreed financial obligation (like loans or mortgages)] on or before [date]
• [utility bills (like electricity or petrol)] on or before [date]
• [school or work fees (like tuition)] on or before [date]
• Pay [personal borrowings (like the money you owed your neighbour)] on or before [date]

The format is pretty standard: you need to pay [something] on or before a given [date], but it really helps if you see a hierarchy of your priorities so you can budget accordingly. Compared to the to-budget list, which requires careful bulk payment planning, the to-prioritise list is more of a come-what-may approach where you simply pay the highest priorities until you can’t pay more.
The Detailed Action List

Now, using just the to-budget or to-prioritise list separately might not be such a sound idea, especially for people who have tight budgets that require attention to detail. The best approach is to combine the two: figure out the prioritisation of your financial obligations and then assign parts of your net income to deal with them in the order you decide is best.

Your list now becomes a detailed action list. The main advantage of a detailed action list is that it takes into consideration that your budget is limited, so everything is prioritised, but it also takes into account how much of your net income you can spend for everything. This helps in scheduling payments, which is great for such obligations like paying your credit card bills.

Your credit card bill is a unique financial obligation in that you know you can just pay the minimum instead of the full balance, but doing so would cause your account to incur more interest. Using a detailed action list for your credit card would ensure that you not only pay on time, thus avoiding late fees, but you also pay as much as you can and not just the minimum, so you avoid piling on the interest.

You’ll soon notice how a to-do list can help manage not just your credit card bills, but your finances at large.

Feature by Michael Vincent Mislos