Managing finances is not something that comes easy to a lot of us once you start earning and having financial responsibilities it can be very easy to lose track of what is happening with your financial situation. On top of your rent, bills and monthly spends you will have to manage any credit which you may have, interest payments and savings, all of which can weigh heavily and lead to mismanaged finances.
There are great people out there like Steve Pybrum who can offer excellent financial advice for you personally or professionally if you are the owner of a business and today we are going to look at a few ways that the experts recommend that you better manage your finances.
The first place to start when looking to better manage your spending is a balance sheet, a basic task which outlines how much you earn each month and then every financial responsibility which you have. It is important that when you are writing down your expenditure, that you keep this to the money which you cannot avoid spending, rent, bills, transport for work, things like this, we can deal with the spends later. Having this balance sheet will give you a clear picture of where you stand each month and how much surplus money you will after everything is paid off.
In order to better manage your expenditure it is important that you spend one month, payday to payday, tracking your spends. You can do this with pen and paper if you wish or you can download one of several phone applications which will allow you to easily track your spending. After the month is out, review your spends, you will probably be surprised at quite how much you have spent on the smallest of things, it all adds up over the month. Once you have this information you can start to attack your spends and minimize them, that daily coffee and sandwich, the night out which you didn’t plan for or the birthday gift that you had to buy last minute. With this spending information you will not only have a clearer picture of how you spend your cash, but also where you can trim the spends.
There will always be something that you will have to pay for that you didn’t plan, this is unavoidable but you can greatly minimize how often this happens with a strong 3 month plan. Let’s say you have an upcoming wedding or a birthday, it is far better to put away a little each month than taking the hit in one, a good plan will help you to put a little money away to pay for big events. Having a financial plan can also help you to make savings, try making a 6 month savings goal whereby you put a little bit of money away each month and put it into a savings account, it may not seem like much but at the end of the 6 months, you will see that saving is possible, especially if you have cut down on spending.