An Efficient Personal Money Management System
I am sure that none of us would like the feeling of ever not being in total control of our money. We work hard enough to earn it so why not spend it wisely.
Budgeting your personal finances is exactly that. When you set up a budget in the right way you will truly spend wisely, making best use of your money and even be able to save a little at the end.
My first budgeting secret is to set some goals.
You might decide that you want to spend everything on the necessities of life such as the regular monthly bills but that might be very exciting for you. Then decide what you might like to have in three months time, then one years time and put a plan in place to get them. You will feel a lot happier buying them with money you already have rather than having to get a loan for them.
However you must still know what your regular monthly essentials are. Calculate how much you spend on rent or mortgages, then on the utilities to heat and light your home and then on the groceries. To have a warm home with plenty of food is an basic essential for everyone.
Finally look back a few months and find out what you spent the rest of your income on. Once you have written all these thing down will you be able to go through them and discover where you might be able to make some savings. You may feel that you can cut back on some of the basics but you will almost certainly find out that you do not need some of the impulse buys that you made.
Even that coffee from the machine in your office, although not costing much, will add up substantially throughout a month. Do you really need to get a morning newspaper as well as an evening one? When I became the money advice expert for our family, I decided to take my own coffee to work and catch up with all the news from the television and internet. By saving a measly $5 a day on these things, I managed to save $150 a month which adds up to a whopping $1800 in a year. Plenty to go on one of the nice Western Mediterranean cruises.
Just make sure that you avoid debt whatever it takes. You will simply be paying higher interest rates and even interest on the interest that they charge you. Make sure that you meet all the payments on your credit cards before the end of each month to avoid excessive late payment fees.
If you have already started on the slippery debt slope pay the most to the companies which are charging you the highest interest rates. It will not save you a lot but every little bit helps when desperate. If you do this consistently you will soon get back in control.
Of course you also need to make a note of how much income you have each month so that you know when you start having a surplus. You can keep track of all of this on a piece of paper, a spreadsheet if you are computer literate or buy some journals specially prepared from your local shop.
We will not all operate it in the same way so find something that you find easy to use, stick to it and you will soon have an efficient personal money management system in place.
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Twitter: HansSchoff
says:
Hey Trevor, regrading budgeting, a good tip for those people trying to get out of credit card debt is to focus on paying off one of your cards – maybe spending an extra $150 a month or whatever to pay down that balance (stop using them in the meantime obviously). Once that first card is paid down, add that additional $150 a month payment plus whatever minimum payment you were already paying to pay down the next card and continue this process card by card. You would be amazed how fast you'll get out of debt and actually enjoy the process because of how much faster the process is sped up.
Hans Schoff recently posted..Creating Wealth – Ways to Make Extra Money Around Your Schedule
Great tip Hans. The first credit card that you choose to pay off should be the one with the highest interest rate.
Managing your wealth is an important task and it requires dedication and proper budgeting one has to decide that weather he wants to save money or spend it usine ur income for the things you desire is sometimes a waste of money things which are really needed should be focused so that u can save your money and use it wisely.
Making a budget and then just following it will surely save your money and u will be having the best of the finances with u
If one wants to have a balanced financial life then one has to take care that the expenses are in control so that there won’t be any extra burden on the person’s finances.
Twitter: AnnCapatino
says:
Hi Trevor,
Very interesting post! It’s a shame that all those things aren’t taught in grade school!! If we were able to form those habits that early, we would all be richer and a lot happier too! You made several good points for folks to follow. Thank you for sharing, enjoyed your article.
Ann recently posted..New Era Offers A Professional Referral Partnership Program – A Trusted Resource For Your Clients
Thanks for the compliments Ann. Maybe one day someone will take this blog and use it in the school curriculum.
Money management is really essential nowadays especially that we are on recession. At first, it may be hard to adjust in cutting your cost. You might be used drinking your coffee at Starbucks but it’s just a matter of Budgeting and proper mindset.
Sad thing is Jerry that some people just couldn’t give up their Starbucks…
Controlling your wealth is an imperative task and it needs commitment and proper budgeting one has to choose whether he wants to save money or spend it.