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Control your Finances with these 5 Simple Tips
Do you feel like you have been living your paycheck to paycheck and don’t know where your money goes by the end of each month?
No matter how your income is, what matters is the amount of money you make relative to your monthly expenditure.
For instance, if you make $3000 and spend $2000 monthly, you are less financially stressed than when you earn $7000 and spend $8000 per month. Improper money management, according to attorney Walter Benenati, could lead to accumulated debt and other financial problems.
It’s time to get your financial life together — no more excuses. Sure, drawing an effective budget sucks. And so does being broke. Rather than being freaked out by your current financial chaos, set a plan that will lead to better business management. Here are the essential steps to follow.
First things first: Where does your money go?
You cannot manage what you don’t measure. Check your last three to four months credit card statements and bank statements and put your expenses in various categories.
List everything purchased by check, automatic withdrawal, credit card, debit card, or automatic withdrawal. Though it’s challenging to track cash purchases, you can still see the amount you withdrew and the available cash.
By analyzing your spending habits, you can cut unnecessary expenses and draw a good budget.
Create a sustainable expenditure plan
As much as you want to lower your expenditure, it’s not a good idea to cut everything fun out of your monthly budget. You can’t sustain it. It is like someone on a fad diet.
Create a spending plan rather than a strict budget. Allow yourself to spend enough amount of money to take care of your needs without overspending. Take control of your purchasing habits.
For instance, you can spend 70% of your income on essentials such as rent, food, transport, and more. Set 15% for your retirement, and 15% of your monthly wages for entertainment.
Set your financial goals
Studies show that individuals who create cohesive narratives for their lives are likely to be more successful. Putting your business goals on paper helps set the stage for how you will achieve them. It’s like setting a roadmap for your success.
Consider writing down all your financial goals and set timeframe for them. Break down these goals into small manageable milestones.
Completing each sign keeps you motivated to continue working towards achieving your bigger financial goal.
Learn more about personal finance
If you intend to change something about your personal finance and you aren’t sure about how to go about it, it’s time to do some research. Libraries, bookshops, and the internet have countless books on improving your personal finance.
You can learn anything from how to manage debt, manage your own money, how to build an investment portfolio, and more.
Additionally, you need to learn the right saving habits and investments. These are essential steps when it comes to gaining full control over your finances.