Managing your personal finances is an intimidating concept to some. However, it isn’t nearly as difficult as so many believe. You can gain control over your finances by employing three simple tips that will help you manage your monthly income, create a budget, and save more money. It’s easy to regain control of the money you make when you utilize these tips.
Track All Spending
Write down every penny you spend each month. It doesn’t matter if you use credit, debit, or cash. Everything you spend needs to be written down and organized into categories such as housing, entertainment, transportation, savings, and food. At the end of one month, you will have a much better idea of where all your money goes. This can help you locate and eliminate wasted funds, which will help you gain control of your personal finances. Knowing exactly what you spend can help you see where you are overspending, where you are not spending enough, and why you never seem to have enough money left over.
Create a Budget
Now that you know where your money is going, create a budget and stick to it. It’s far easier to create a budget when you know exactly how much you spend each month on your living expenses. To live within your budget, you will continue to track your spending every month. You have the freedom to adjust your budget when and where it becomes necessary. Your budget should include all your monthly living expenses and incidentals such as entertainment, new clothes, and travel.
It’s important to save enough money to handle an unforeseen emergency or even just to have on a rainy day. This means you need to account for savings in your monthly budget. Ideally, you should place at least 10 percent of your income into your savings account on a monthly basis. If you find extra money, put it directly into savings. Extra money includes overtime wages, refund checks, and or bonuses. The more you save, the more secure your financial future becomes.