If you’re finding it increasingly hard to manage your finances, you’re not alone. It’s hard to set a budget, much less stick to it, and it’s even harder to save money if you don’t know how to handle your income. But you should take heart – it’s not as difficult as you may think to learn how to manage your finances. If you would like to manage your budget and acquire savings at the same time, here’s your top guide to the easier – and better – management of your finances.
Work out your budget
Your first step is to work out your budget. List down all your monthly expenditures, beginning with your household expenses, cost of living expenses, financial product expenses (such as insurance), travel and transportation expenses, leisure expenses, and other miscellaneous expenses such as that occasional bottle of wine, a gift for a friend, etc. Household expenses would include utility bills and payments, whilst cost of living expenses would include food and other necessities. Make sure you list down everything you spend on each month, and if you’re unsure about the actual cost of the expense (such as miscellaneous expenses), come up with a reasonable estimate.
Know your income
Next, list down how much you receive in income and other sources each month. Now, this is where it gets a bit tricky because this is where you find out whether your expenses are equal to your income. If they are not (meaning you spend more than you take home), then it may be time to figure out how you can balance your income and expenditures. Make a list of expenses which you can save on, such as a gym membership, lunch at restaurants, takeaway coffee, and so on. There are many ways through which you can save money, but you need to know what you can save on first.
A lot of individuals have difficulty keeping up with credit card payments, simply because we have come to rely on these nifty little cards for the smallest of expenses. Before you use your credit card, think twice. Do you really need to use it, or can you pay for something in cash? Is it a worthy or necessary purchase, or is it an impulse buy? Take a good look at your credit card statement to have a better idea of what you are spending on. If you have a large debt on your card, focus on reducing and eventually eliminating that debt first before you purchase anything else. This way, you can begin with carte blanche, paving the way for the better management of your expenses.
There are lots of financial resources such as employee financial wellbeing services you can benefit from which can give you excellent advice on how to manage your money more efficiently. Some services even come with bonuses such as access to loans with easy repayment terms and better rates when you really need it.
The key to managing your money is to know how much you actually have, how much you receive, and how much you spend. When you have this, you can take whatever steps are necessary to make great changes that will transform your life.
