There are 7 ways to manage your money which are set a budget, list your expenses in detail, get your budget back on track, get everyone involved, stay flexible and set savings goals.
Why set a budget
The first step in controlling finances is to set a budget. It takes a little bit of effort, but it is a good way to quickly understand your financial income and expenditure. Setting a budget can help you achieve the following things:
- Will not end up in debt
- Will not be bothered by unexpected expenses
- More likely to get a good credit rating
- More likely to be accepted for mortgage loans or personal loans
- Be able to find savings
- You can save money to spend the holidays, buy new cars or other things you want to do
List your expenses in detail
To start budgeting, you need to figure out the various amounts you spend:
- family expense
- living cost
- Financial products (insurance…)
- Family and friends (gift…)
- Transportation (car fare, public transportation…)
- Leisure (holidays, sports, restaurants…)
A good way to set a budget is to use a spreadsheet data sheet to list all items. Get all the information about your income and expenses (bills, bank statements…) as much as possible and start using it. Or write all its budget on paper. There are also some good free budget apps, and your bank may also have an online budget tool that can get information directly from your transactions.
Get your budget back on track
If your income exceeds your budget, you need to find out where you can cut it. For example, you can eat lunch at home, which is easy to do. Cancel your membership of a fitness club that you don’t use. You may consider reducing your family expenses, bank loans, and so on. You also need to keep a record of consumption and write down all the goods you purchased within a month. Or, if you can use your bank card to pay most of your expenses, check your bank statement from the previous month to determine where your funds are going.
Get everyone involved
Involve your family in the budget. Sit down and make a plan that you can stick to. Calculate the amount of expenditure available and reach agreement among everyone.
Life is unpredictable, so if there are changes, or at least every few months, check your budget and expenses. Maybe you will increase your salary or decrease your salary, which means you have to save more, or you may find that your household expenses increase.
Set savings goals
Some people find it difficult to obtain incentives to save, but it is usually much easier if you set goals. Your first step is to save some emergency costs-if you encounter an emergency (such as a boiler failure or you cannot work for a period of time), you can rely on the money to maintain your current life. Try to store three months’ worth of expenses in your account. Don’t worry if you can’t save it directly, but keep it as the target of the target. The best way to save money is to pay some money to a savings account every month. Once you set aside the emergency fund, the savings goals you can consider may include: buying a car without a loan, not worrying about bills when you come back from vacation, and having some extra money to use during maternity or paternity leave.
As your savings begin to grow, you can: Put more money into your retirement fund. This is a good way to ensure that you can live more comfortably in the future. Develop an investment plan based on your goals, risks and schedule. This may be your financial goal: to achieve financial freedom within 5 years.
If you are trapped in debt
Generally speaking, the most difficult part of repaying debt is taking the first step.
If you know you are in financial trouble, it is easy to feel overwhelmed. Burying your head in the sand and ignoring your bank statements and payment requirements will not make the problem any better, and it will make it worse. So, take a deep breath and try to read this article again. Once you have completed this, at least you will know the reason for the debt and what you need to deal with to find out what needs to be done next.