Most of us are stressed about our finances all the time. It is very important to know how to spend, invest and save our money but there are hardly any schools out there which teach these to the kids. Most of the times, people get into a job and struggle to pay their bills and manage their finance efficiently. The secret here is that everyone is capable of handling their finances; they just have to learn how to do it and pull their lives together.
The following are some of the ways in which you can manage your finances:
Establish your income figure:
Most of us tend to jump into writing down the expenses we have every month, but before that, we need to understand that to spend your money on various things; you need to know how much you actually have in the first place. Sit down and think about how much you make every month and make sure that you exclude your taxes and other bills. The remaining money you get is the amount you can use for spending on other things.
One of the first things you need to check is that if you are spending more than what you are earning. If that statement is true, then you definitely will be in debt and have a poor quality of life. As you have calculated how much you are making in a month, you need to make sure that you stick to that budget. Make a list of what are all the things you will need and analyse where you are unnecessarily spending your money. Before you buy something, think if you really need that product or is it just going to sit in your closet without being used for years.
Have a savings account:
It is extremely important to cultivate the habit of saving. You never know when in life you will need a certain amount of money. If you happen to meet with a huge medical bill and you do not have any savings, then it is going to affect you in many ways. You might never know what you want down the road, and thus it is quite essential to have a saving account.
Use Credit cards instead of Debit cards:
Debit cards have the capacity to pull into a hole from which it is very hard to climb out of; you need to follow the basic rule which is: if you don’t have the money for spending on a particular item, then do not buy that item. If it happens to be an essential thing, then you need to cut down on other expenses. Debit cards will make you borrow from your payment which you will be getting next month, and you will never have enough to spend for the next month, and the cycle goes on.
Managing your finances is not a great deal, it is about getting your life together and regulating your income vs. your expense.