Isn't it Time You Got a Grip on Your Personal Finances?
The first step to avoiding nasty suprises and toward financial success is all about fully knowing and understanding your current financial situation. Here's how you can achieve this?
Step 1
Track and record all of your spending for full 2 months. Start of the 1st day of the month, it's easier!
Use a personal finance software program to record and keep track of all your personal finances. Take a look at Quicken or a similar program.
You should start out by entering into the program full details of your present-day personal bank account, savings, investments, and cash flow situation. You should enter all regular expenditure and income.
Step 2
You will next need to acquire a file container to create your 'money file'. This will need to be categorised by type of expenditure. You can do this by using plastic wallets and labelling them with your categories.
Suggested categories are:
Personal: e.g. beauty products, cosmetics, hair care
Household: e.g. food, drink
Entertainment: e.g. Nights out, cinema
Charitable: e.g. donations
Work/Business: e.g. Expenses: fuel, travel etc
As you make payments, file all the receipts you receive.
You can also add your own categories as appropriate. It shouldn't take you more than 5 minutes each day t do this, once you have set things up.
Step 3:
Use the software programme to enter detail of any payments you make, and other income and expenditure.
When it comes to accounting for cash expenditure, there is no need to be exact about the amount you spend, just try and keep a good estimate of the cash you spend. Do this regularly over the first two months. You will likely see a spending pattern start to emerge.
Step 4:
The next step is to plan your budget. This will take a little bit longer at first. You can't do this effectvely without going through steps 1,2,3 first.
The idea of planning your personal budget is to get a better understanding of where your money is going, which you will have learned by going through all the previous steps.
You should now be able to see where you are financially. It may be that your outgoings exceed you income!
If this is the case, by reviewing the information you have gathered over the first two or three months you can look to either cut back on certain expenditure or look to increase your income.
Hard choice but at least you will be making decisions based on solid information.
The first step to avoiding nasty suprises and toward financial success is all about fully knowing and understanding your current financial situation. Here's how you can achieve this?
Step 1
Track and record all of your spending for full 2 months. Start of the 1st day of the month, it's easier!
Use a personal finance software program to record and keep track of all your personal finances. Take a look at Quicken or a similar program.
You should start out by entering into the program full details of your present-day personal bank account, savings, investments, and cash flow situation. You should enter all regular expenditure and income.
Step 2
You will next need to acquire a file container to create your 'money file'. This will need to be categorised by type of expenditure. You can do this by using plastic wallets and labelling them with your categories.
Suggested categories are:
Personal: e.g. beauty products, cosmetics, hair care
Household: e.g. food, drink
Entertainment: e.g. Nights out, cinema
Charitable: e.g. donations
Work/Business: e.g. Expenses: fuel, travel etc
As you make payments, file all the receipts you receive.
You can also add your own categories as appropriate. It shouldn't take you more than 5 minutes each day t do this, once you have set things up.
Step 3:
Use the software programme to enter detail of any payments you make, and other income and expenditure.
When it comes to accounting for cash expenditure, there is no need to be exact about the amount you spend, just try and keep a good estimate of the cash you spend. Do this regularly over the first two months. You will likely see a spending pattern start to emerge.
Step 4:
The next step is to plan your budget. This will take a little bit longer at first. You can't do this effectvely without going through steps 1,2,3 first.
The idea of planning your personal budget is to get a better understanding of where your money is going, which you will have learned by going through all the previous steps.
You should now be able to see where you are financially. It may be that your outgoings exceed you income!
If this is the case, by reviewing the information you have gathered over the first two or three months you can look to either cut back on certain expenditure or look to increase your income.
Hard choice but at least you will be making decisions based on solid information.
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