Want to know the secret of being good with money? Use the easy ways given below, to easily take control of your personal finances instead of feeling that money controls you.
Table of Contents
1. Track daily expenses
You might think that only the big ticket items drain away your personal finances. This is not true: even the daily pennies you spend add up over time. It is very easy to lose track of $5 here, and $10 there. So try and spend 10 minutes each day to note down each and every expense you have made over the day. Do this activity for a week. This is the recommended best way to track finances in a marriage as well as a business. This simple activity will help you take a closer look at your daily expenditure, which, in turn, will give you a realistic idea about saving and investing right.
2. Compare money in and money out
Think about where your money goes out each month. It will likely be the following areas:
- Weekly grocery, food, transport
- Mortgage, rent
- Medical expenses, clothes, car maintenance
This is an important step to keep track of finances in business and a marriage.
3. Set aside a budget
The best way to track finances is to set aside a budget. Budget planner is a simple tool to help keep track of money coming in and money going out. It can help you see if you are spending more than you can afford. This step will help you take action and find the right balance between spending and saving. There are many free online budgeting tools available. Here is the link to a good budget planner. It is easy to use and you can download your budget as an Excel file too.
4. Utilize the correct factors in the budget
The budget tool will require you to input your income (if it is variable, you will need to assume a figure based on last year’s earning). Then, take a look at the bank statement and enter the amount going out. Is your income higher or lower than your expenses? If you are spending less than your income, your next step will be to fine tune balance between saving and spending. If you are spending more than your earnings, you must take some action to fix this. Try and reduce your expenditure to affordable levels. Once you get this sorted, you will be in a better position to move on to planning your future goals.
5. Seek financial advice
If you are in debt, a financial advisor can help you get a clearer picture of your situation and also advice you about steps you could take to work a budget out. Sometimes, even friends can help you out by giving tips and ways to save and manage cash flow.
6. Save money
There are many easy ways to save money in order to manage personal finances:
- Use local library instead of buying books, CDs etc
- Look for bargains online and offline
- Shop local at farmer’s market as it is often cheaper
- Find low cost entertainment ideas like picnics, free concerts, half-price shows etc .
For more tips and easy ways to save money, click here.
Prioritize where you want your money to go. Again take a look at your money in-the basic necessities and lifestyle choices (things you desire but can live without). Set aside enough money for basic necessities (rent/mortgage, food, transport, health etc). Now work out what you can afford. Divide the remaining money between spending and saving. You can take a print out of the budget planner; highlight necessities in the budget and identify things you want but can do without. Now identify areas where to cut back on.
8. Switch and save
Another important way to manage finances effectively at home is the switch and save method. Are there subscriptions you could cancel or switch? Are you paying more for your car/health/home insurance than you need? Can you start taking a list and only shop for those items you really need? Can you access Internet elsewhere, such as a free public library? Can you get a cheaper plan for your cable/Mobile/Internet? Can you make your own lunch instead of eating out at work?
9. Increase your income
Can you make money part-time through your hobbies? Are there any unwanted goods you can sell? Can other members of the family contribute towards earnings?
10. Set realistic goals
This is an essential part of managing and tracking personal finances in a marriage as well as a business. You could set a goal such as saving for a foreign trip, child’s education, your own home, your wedding, a large celebration, retirement etc. Again, prioritize your goals, see how much your main goal will cost and set a deadline to achieve it. Also think of ways you can try to access the goal.
Taking charge of your personal finances will give you better control and eliminate stress. This, in turn, can help you move forward with confidence. Now you know the 10 easy ways to manage personal finances. A few steps will certainly do the difference.