With increased market volatility right now, it's important to organise your finances. While buying S&P/ASX 200 Index (ASX: XJO) shares can be tempting, it's important to make sure you're financially secure before thinking about investing.
So, here are a few easy tips to get your finances sorted and buying more ASX 200 shares in no time.
Put together a budget and stick to it
First and foremost you'll want to reduce your spending and put together a budget. A budget is a great way to organise your finances and get a picture of where your money is going. I like to download my bank statements and see where my money is actually going. Once you know what you're actually spending, then you can decide where you want to spend money.
If you're fortunate to still have cash flow at the moment, then you could allocate extra funds to buying ASX 200 shares. Whether you want strong dividends from Fortescue Metals Group Limited (ASX: FMG) or you're after cheap ASX 200 shares, putting some cash aside in your budget could pay off in the long-term.
Figure out what you really want to spend your money on
When times are tough, cutting back spending is essential. Whether you're still working or not, if you want to organise your finances it will require some tough decisions. Once your essentials are covered and you've cut your spending, you can decide where you want your money to go.
If that's on the occasional splurge, that's fine, but you could also invest more. If you can buy ASX 200 shares at discounted prices right now, that could pay off in the long-term. Now, that's easier said than done. I wouldn't mind buying NEXTDC Ltd (ASX: NXT) shares given the potential for increased data security and remote working capabilities once the coronavirus pandemic passes.
Buy, hold and wait
Once you've decided on your ASX 200 shares to buy, you can sit back and relax. With a few easy steps, you can manage your cash more effectively and build long-term wealth. However, make sure you don't panic in the current bear market.
Having organised your finances, you can buy and hold your chosen ASX 200 shares for the long-term. Who knows, when all of this has passed, you may already have strong portfolio gains if you're lucky.
