For financial dreams to come true, thoughtfulness and prudence in those matters that involve money are enough. By and large, managing personal finances means controlling expenses, planning for the future, and investing wisely.
How to Manage Money
Drawing on the most popular advice from successful investors, we can formulate the golden rules of managing personal finances:
- Spend less than you earn.
- Save. Save slowly but steadily
- Prioritize your financial goals
- Don’t pile up debts.
- Insure your risks
These are basic principles of financial success and can be used not only for personal financial management, but also to manage the finances of an organization. Let’s now talk about these in a little more detail. You will find more here.
The Simple Truth – Start with An Excel Spreadsheet
Many families rely on memory and keep finances in mind. But without a rigorous accounting of expenses, it’s hard to know what and how much money was spent. So start writing down expenses and then analyze how you can reduce them. There are different ways to plan: some use smart mobile apps (such as Monefy, Wally, You Need a Budget) or an online bank’s Money Planner, while others prefer an Excel spreadsheet or paper and pencil.
Once you have an overview of spending, set strict limits for each spending category. Try to stick to them. If at the end of the month it turns out that, for example, electricity was spent much less than planned, it would be wise to immediately transfer the remaining amount to a savings account.
Write Down the Bills That Are Pending Payment
Write down all bills that are pending (amount, due date, interest and penalties). Make a repayment schedule and, first, pay those bills that have the highest interest charges or whose due date is closer. If bills begin to pile up, contact the business that issued the bill to negotiate a new payment schedule or deferment, if possible.
Review Service Packages
Most of us enter into contracts with service providers and don’t check later to see if they meet our actual needs or if we are overpaying for them. If you find that you only watch three channels on TV but pay for a hundred, ask your service provider for a better deal or find out if there may be a competing company on the market that offers the same service at a much lower price. Similarly, check your phone packages, power packages, and Internet connections.
Make Smart Choices at The Grocery Store
Developing a weekly menu and making a shopping list based on it helps prevent impulse purchases. If you stick strictly to your shopping list, you can avoid buying unnecessary products that are, for example, offered as part of a campaign. Cooking itself is also an significant way to save money. Self-cooked food is much healthier than cooked food. For example, meat without marinade and spices is often cheaper and healthier, and making your own smoothies and salads is much cheaper than buying them in a restaurant or cafe. It is also important to compare prices. Look and compare the price per kilogram or liter for similar products (this is printed in small print on the price tag).
Evaluate Your Purchases by The Criterion, want – Need
If you want to determine for yourself where the line between emotional desire and real need lies, it’s worth asking: “Do I really need this? And what happens if I don’t make the purchase?” With this test question, you can protect yourself from a lot of purchases triggered by momentary emotions, for example, under the influence of tempting discounts and campaigns.
Give Up All Kinds of Addictions
Everyone has addictions that cost too much money. These include alcohol, tobacco products, and carbohydrates. A seemingly small expense can add up to a significant amount over the course of a year. Giving up some addictions will save you both money and your health.
Avoid Unnecessary Debt
If you’re short on money, don’t take out new loans. Both quick and consumer loans require new, higher costs in the form of fees and interest. If you still need credit money, it’s worth asking yourself if the thing you’re borrowing for will last longer than it takes to pay off the loan. Any loan needs should be carefully considered before even signing a contract.
Involve Your Children in Your Budgeting
Since kids are spending more time at home now than usual, this is a good opportunity to involve them in your family’s financial planning. For example, show your children how much money is spent on housing, transportation, food, entertainment, and paying off various loan obligations. Teach your child to make a shopping list and discuss how to choose the most reasonable options at the store.
Open A Savings Account and Pay Yourself First
A small amount of ten to twenty euros a month is enough to start with, but you will accumulate a considerable amount over the year. Open a new bank account in the Internet bank and name it separately if you want (e.g. Savings), it would be good if the name corresponds to your goal. You can move money between your accounts for free and at any time. When you receive your paycheck, always pay yourself first, which means you save the amount you save right away. If you receive your paycheck on a certain day of each month, you can make a standing payment order and then a certain amount will automatically be transferred to another account. You may find something here for you login wirecard activate.
Try to Earn Extra Money
Just as important as saving is increasing your income. If you have a full-time job, but sometimes there are unoccupied moments in your schedule, temporary jobs are a good option for you.
Now you have solid money management principles in your hands, all that’s left is to turn them into habits. It’s not easy, but it’s worth it. You’ll be surprised at how much easier it is to master the financial skills that used to seem so difficult.
We Hope This Article Was Helpful to You!
