Monitoring income and expenses is a cumbersome process that requires patience and foresight. While balancing the checkbook and making sure that the payment bills are likely to be flat, the security provided by managing your funds is invaluable. By using some simple techniques, you can make the process simple and enjoyable.
When I first entered college, I found myself having to manage my first income and a fair amount of bills, groceries, mobile and entertainment money. I spent the first semester going out to eat, watch movies and buy unnecessary items. I soon discovered that I saved my savings from my summer job. I don't have a comfortable financial buffer, but I quickly get a meager income from part-time campus work - let's say that ramen is part of my diet.
Unfortunately, I didn't build a balanced budget to make sure I paid all the bills, saved money and allocated "fun" money. I ignored one of the key steps in managing my funds: I didn't set a budget to understand my income or expenses. It is important to sit down your pay slips, bills and receipts to determine how much money each item can be allocated. In fact, this basic step is actually half of ensuring a sound money management strategy.
The impact of not balancing your budget often leads you to lose money. For example, when you buy an item and don't have enough money, many banks charge an overdraft fee. During college, I often found myself not only running out of bank accounts, but also spending a lot of overdraft fees - usually around $35 - and barely monitoring my spending. It's hard to imagine now, but I'm actually paying for my bad money management options.
So what are the few simple steps to balance your budget? The first step you have to do is actually the money you receive each month. Add the sum of all the revenue or support you receive - whether it's from work, rental properties or relatives. After calculating your monthly income, add all your monthly bills - rent, mortgage, mobile, water, gas, electricity, etc. Once you have both numbers, deduct your total income from your expenses, and what is left of your earnings from each salary.
Many people now decide to use the remaining income for personal hobbies or entertainment. While it is certainly exclusive to use a portion of the income for these items, it is unwise to spend all of the extra money on dining, clothing or other luxury items. Conversely, saving territory or investing money in a personal project allows you to invest and help you grow into a person. For example, I spent my summer working for a landscape company during college, so I can invest in my education and myself. Although I got a lot of surplus money from my work - I live with my parents in the summer and have almost no bills - I choose to invest and save for my education. This investment will take years to pay off, and I have to sacrifice to go out to play; however, the "wolf" I saved in the summer helped me pay for college and develop a better future.
Finally, it's important not to treat money management or budget as an obstacle to your life. Instead, it is important to see it as a necessary tool to ensure future success. When I save money now, I feel that I have no "sacrifice" tomorrow; instead, I realize that I am sure I will have a safety net in the future. By positioning the deposit as a "precautionary measure", it redefines it as a necessity and a more important part of life – not a heavy sacrifice.
So, next time you find yourself having no money or paying overdraft fees at the end of the month, please review the techniques you use to manage your funds. Make sure you have a balanced budget, allocate "fun" funds and invest in your future. Whether you are a young professional or a retired individual, the skills needed to develop management funds are never too late. Most importantly, don't think of budgeting money in a harmful way. Rather than treating it as a deterrent to current life, rather than treating it as a necessary insurance policy to ensure a bright and secure future.
Orignal From: Personal financial tips
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