Finance is an integral part of a modern person’s life. Many years ago, it was possible to kill a mammoth in order to feed a family, make a necklace, and insulate a hut. Now everything is decided by money.
The ability to manage money is one of the most important in our lives. Our article will be useful to most people – those who have no idea how to spend money wisely to improve their lives and those who do not know how to plan a family budget.
People manage personal money differently. Somebody is able to manage his earned money, and he has enough of $ 1,000 per month, while others do not know how to manage the money, and they lack a salary of $ 5,000.
“Money management” the main skill all people should have. So, take smart tips and understand how we can spend money.
Take Everything Under Your Control
One common problem is that people live without taking their real income into account.
For example, if they count their income, it will become obvious that they cannot afford to visit an expensive restaurant three times a month. However, they still spend money on it. As a result, they have to borrow 7-10 days before the salary, because there is simply no money. There is nothing to buy food for, refuel the car, replenish the balance of your mobile phone account, etc. As the result, they have no money at the end of the month.
- First, calculate all the fixed costs for the month. These are payments for utilities, Internet, communication services, payments on existing loans, transportation costs, meals.
- Secondly, add to the amount received the planned “inevitable” expenses – for example, going to the dentist or hairdresser.
- Thirdly, divide the rest of the money into two parts. You can allow yourself to spend the first part. The second part should be saved (in the safe, for a deposit, etc.), and the bigger amount of the second part, the better your financial situation and your chances of “not drowning” when a crisis will come.
Today you can find more than a dozen programs for conducting home accounting, which will teach you how to manage your finances.
Follow Your Needs and Don’t Be Afraid of Loans
“Debt is a terrible thing” – how often do you hear about it? It is not reasonable to reject financial help when you really need it.
For example, if you need to fix your car but you don’t have enough money for it, you can get personal loans online and solve your problem in a matter of days. So, you will be able to go to work by car with comfort. If you are afraid of taking a loan and you decide to save money for 2 months to repair it, you should use public transport or taxi that leads to extra expenses and decrease the amount of savings.
It doesn’t mean you should take a loan in any case even if you want to buy the fifth pair of shoes. Therefore, borrow only in the most extreme cases, get loans only by carefully weighing and analyzing your capabilities and only in emergency situations.
Personal Finance Management
A financially successful person always manages money wisely, no matter how much he makes. Do not forget the well-known truth – “Avaricious pays twice”, which warns us that we must save wisely. Choosing only the cheapness of the products, you can greatly lose in quality, which will entail additional costs.
Do not behave in the store like a child, shouting “I want!”, and be able to stop and concentrate on current goals (since I need a jacket, it means that today I will buy only a jacket, despite the fact that there is a 30% sale in the shoe department). Despite the fact that buying shoes at a discounted price seems quite reasonable, in reality, if you already have shoes, boots, and sneakers, you just throw the money away.
Try to record absolutely all purchases you have made per month. After 30 days, sit down and think about what you can remove from this list and what is really necessary. You will be horrified by how many unnecessary things you have bought during this time.
Principles to Spend Money Wisely
- Buy in bulk. Real money savings can be obtained by buying goods in bulk. All rich people do this because they know the value of money too well.
- Haggle and claim for a discount. Even Donald Trump is not shy about asking for a discount coming to a store and offers his price for a good. “I hate to pay the price that is indicated on the price tag, and it always troubles me when I see other people dutifully spread the amount requested by the seller.”
- Buy out of season. The habit of buying at the best price can save you a lot of money. Feel free to visit seasonal sales, where breathtaking discounts on all products are provided at the end of each season. Now you can buy a coat two times cheaper in the summer than it costs in December.
At the end of this article, I wish all my readers to manage their funds wisely, because it depends on whether you will live a rich life or be in constant need.