Management and personal finance is the process that is essential to achieve financial well-being. Only someone who knows how to optimize costs, plan revenues and allocate resources will be able fully to meet with their needs.
There are several key principles that will help you to calculate the expenses and establish an effective system for managing a personal budget;
Need to spend less than you earn. This advice may seem prosaic, but many do not pay enough attention to the calculation of income and expenses. In order to manage personal finances be sure to set aside at least 10% of monthly earnings. If you have additional income, do not waste your money, and set them aside.
Plan ahead to spend your earnings on the purchase of expensive and important things like: car, house etc. To save money would be easier if you provide your schedule: how much must-month delay be. The accumulated money is best kept in the bank: First, you will receive monthly interest on deposits, and secondly you will not be able to spend the money for daily needs.
It is reasonable to invest money. Remember that the tools that are gathering dust in a closet do not bring adequate returns. You can invest your money in a business or put them on deposit – in any case, interest will be worthy of an infusion into a personal budget.
Controlling your personal budget is an essential part of financial management.
The phrase “Money is like the expense,” must become an axiom for the person who wants to achieve financial freedom. Personal budgets must be carefully monitored and analyzed – only then you will be able to avoid unnecessary expenses and save enough money to realize your goals.
Start accounting family budget – just a daily record of all costs. Some prefer the old fashioned tool to use notebook. It is much easier to budget with the help of special programs. The obvious advantage – automation of routine processes can be divided into categories of costs, a timetable for the accumulation of money for a summer vacation, receive plans and reports.
To plan your personal budget is doubly useful to control the family budget itself.
You often have to refuse to buy needed things because the wallet is not corny enough with money. It is not clever to borrow money in advance from relatives, colleagues, friends, as it brings you more problems; borrowed money needs to be returned and you will not be able to hide from everyone;
Calculate how much money did you spend last month? To reduce this percentage, you need to start keeping your own (or family, or household) budget.
Budget is a document that reflects the totality of revenues and expenses of a certain person or organization (in this case the family) for a certain period of time. In some cases, it can also be a financial plan that is set of rules by which the family manages the money.
Keeping the budget is a process that consists several parts (these parts are the same goals of the budget):count of the number of available and expendable cash;cost optimization;planning income and expenses.
Best of all is when these targets are executed sequentially and it is in the order listed. Many people make mistakes, from personal finance management with the second or third stage. Often in the periodical literature, especially in the “glossy” magazines, there are tips “cut costs”, “think how much you want to spend in the particular week, and put exactly that amount in the purse,” etc. This approach may provide short-term effect, but only one point do not be scheduled, the system (if a set of unrelated tips can be called a system) is collapsing, and the family throws this idea and returned to the “intuitive budget.”
The first thing to do is to determine the version of the budget – paper or electronic. In the paper there is one advantage – it is always available to any family member (even if there is no electricity), as it is used when there is no computer. The rest of the budget is more convenient to e-mail – it will sum up and indicate the percentage of the plan or cost overruns, and it is easier to find errors. At first, you can get regular notebook.
Divide the notebook or a large sheet in half. On the left side write down all the profits, and on the right side write down the cost. All attachments on this point also write a column flow rate, but if you prefer, you can allocate a separate investment.
Do not listen to those who will advise first to determine spending priorities and revenue sources, and then record the movement of finance directly to the relevant sections. This will lead to a complication of accounting, it is unnecessary at first.
Do not skip days! You’ll forget all about it and you will wonder what happened to the money.