Five Ways To Manage Your Personal Finance 2013

Five Ways To Manage Your Personal Finance: Are you a spendthrift and want to quit? Do you find yourself spending more than you should be? Do you find yourself incapable of saving? These problems can be overcome if you find the right way to deal with your personal finance. Most of the people have a poor spending habits and that is why they cannot manage their personal finance well. You only need to change your spending habits and be strict on yourself in order to succeed. The following ways will help you overcome this challenge.

Five Ways To Manage Your Personal Finance

Total up all your income

Other than the salary you earn, you could have other sources of income. It could be from your business or dividends from shares you bought in a company. All this income need to be totaled up in order to get the exact amount that you get at the end of the month. It will be very easy for you to budget your personal income with this total.

When taking the total, you need to be accurate otherwise the whole budget will be wrong. Do not spend and fail to record the expense. Every single sent ought to be accounted for. May it be a dollar or million dollars, everything needs to be recorded and accounted for. This is what makes personal finance accountability easy and simple.
 When recording for the expense, do not forget to record the item you purchased also. This will help you in cutting costs whenever necessary. If an item is not necessary and that you can live without it, it will be better if you stopped using it in times of crisis. Personal finance can only be managed if you find out where you are using cash unnecessarily. This is why it is important to record each and everything that you purchase. Five Ways To Manage Your Personal Finance

Make a budget.

 A budget is a very important tool in personal finance management. You cannot manage your income without a budget unless you are a computer. A budget out to be have everything included in it. Do not exclude any income from your budget. In a budget, you need to divide it into two main parts. These two are the income and the expense. On the expense part, you will subdivide it into needs and wants and the income side; subdivide it into salary and other sources of income.

 The income side where you have the salary, you will record all income that you get from your salary including your allowances. In the other subdivision, record all other sources of income that you get. It could be a onetime source of income or a long term one, it does not matter you just have to write it down.
In the expense side make sure you record all the necessary things that you buy including their prices. Necessary things include food, clothing and shelter. These things are said to be necessary because we cannot live without them. This may however be abused if you decide to buy a very expensive clothe in the name of necessity. If you do so you need to record this in the wants side and not needs side. This is because even though it is a cloth you could have bought a cheaper one that is pocket friendly. 

In the wants side, you will record all the other things that you will buy even though they are not necessary at all. It could be something you saw in a store, attracted you and decided to buy. This is called none anticipated item. You do not decide on buying it until that time when it catches your eyes and you just cannot leave it. Some people go as far as taking a loan just to be able to buy the item. That is how crazy it can be. This is why you should avoid such places if you intend to manage your personal income accordingly. Five Ways To Manage Your Personal Finance

Cut down costs.

 After revising your budget at the end of the month, you will realize that there are some things that you buy yet you really do not need them. Managing personal income calls for reduction of such expenses. Most of the people who face this problem are those poor spenders who want to keep up with the lifestyle and fashion yet they cannot afford it. Why do you want to live like Beyonce, wear similar clothes to her, buy the same cologne she uses and so forth? Beyonce is a superstar who is living her life and the life that she can afford. You do not need to strain your personal finance just to keep up with this kind of a life that does not belong to you. My advice to you is living your life the way you can afford it.
 When you cut down these unnecessary costs, you will be able to manage your personal finance because no money is going to waste whatsoever. You will not buy anything that is not budgeted for. When you train yourself to be faithful to your budget just like being faithful to your spouse, you will never find yourself in any personal finance crisis. In order for you to buy any new item you have to fix it in your budget first. If it fits without interfering with your necessities then you can push through with it. If not then you can always save and buy when the savings are enough to buy the item. You do not necessarily have to buy something because the others are buying it. Just buy it at you own time. Five Ways To Manage Your Personal Finance

Save your money.

In everything you do, always make sure you save a something from the coin you make. Never spend all your money at any given point in life. Anything might happen whenever, this saving will be you angel. It will help you overcome that situation you are in as soon as possible. You could say that you are relying on your friends or your bank for help in times of crises. You will be surprised when all your friends fail you when you need them the most. The bank that you spoke highly of could also let you down. Your only option could be your savings. They are helpful in managing your personal finance in that you could use this kind of money to buy yourself something big; a car for instance or even land.

The bank can help you in saving in order to manage to personal income. This can be arranged with the bank where you have your savings or salary account. You can instruct them not to allow you to withdraw beyond a certain amount of money within a given period of time. With this kind of restriction from the bank, you will be able to limit yourself in your spending and therefore managing your finance well. Everything is possible if you believe in yourself. You will be surprised with what your savings can do for you. You do not just wake up one day and find yourself with extra money lying around. You need to save up for something. Even the richest like Carlos Slim do not just spend; they budget for something and save up for it. Five Ways To Manage Your Personal Finance

Invest your money.

 Investing you money or savings is the best way to spend your money. This is because the investment will grow your money with time. It is important to know that money depreciates with time. A dollar today is not worth the same tomorrow. Keeping your money in the bank is not such a smart move. Unless you are saving up to buy something, investing your money could be another source of income.

 It is important to invest your money because it will increase your income by earning you dividends. It is however necessary for you to be careful in the company that you invest your money in. Be sure that is a company that is making profits and not losses. As much as the investment plan can be a good way of managing your personal finance it could also be your down fall. Companies can really bring you down with them in case of bankruptcy and insolvency.
 When looking for the right company to invest in, do not relay so much on the “agents”. There are very many people out there who claim to be agents of a particular company. They will give you all the information about the company until you believe them. These people will tell you to buy shares from them because they have been authorized by the company. 

You should watch out for such people because they are just there to get money from you. Inquire directly from the company more about the company you want to invest in. Ask them about their agents and where they are located. If possible ask for their names to avoid being coned by those who are pretending to be agents. Be smart as you try to manage your personal finance not to lose any coin to anyone who has not earned it. In this economy, you cannot afford it. Five Ways To Manage Your Personal Finance

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