In order to properly take care of your money management you don’t have to be Bill Gates. You just need to be able to take care of a few simple things.
Not saying that keeping track of your money can’t be a
difficult task to accomplish sometimes, but when you break it down into three
simple questions it gets a lot easier.
Where is my money going?
Start by examining your costs and what you may owe to things
such a home loans, credit cards, financial aid loans, or any other type of
debt.
The next step in conquering your money management is keeping a
very detailed account of all the money that is going out of your pocket for at
least a month. This will come in handy when we move forward with our next step.
Get an idea of what fixed expenses you might have including
rent/mortgage, car notes, or insurance.
Following this we are going to break everything down into
categorized spending, such as what you may spend at the grocery store, on gas,
or going out to eat.
This is called doing a cost analysis.
How much can I keep?
Often times we think we need to be saving for things like that
new car, addition to our home, or even a new purse. These things are often what
we might think we need to save for, we often overlook the unexpected things like
when the dishwasher breaks or the transmission goes out on your car. This is
where identifying what we really need versus what we want comes into play. We
will most likely need to fix or replace a household appliance that goes out
while we can usually skip that designer hand bag or new TV.
When considering these things in our money management we also
to need to think of the future. I imagine most of us want our children to be
able to go to college or even retire one day.
Itemizing the things that we are wanting to save for and
putting them in order of importance is a great step that will help you
accomplish your goals. You also need to be aware of how much things will
actually cost, like how much you will really need in order to retire.
Concentrate on the goals that are on the top of your list and
be sure to have one for the present and the future.
You have just calculated your expenditure projection.
What will it take to get there?
Go through everything that you spent in the last month. Look
at what you really need against what you can cut back on. Try to eliminate
those nonessentials in order to save every dollar you can.
Now you should have a good idea of what things you can do in
order to improve your money management on multiple levels. In fact this is now
the new budget that you can follow each and every money allotting X amount of
money to each of the categories.
Some other great ways to get ahead on your money management are opening up a saving account that will have automatic deposits. Or set up an IRA in order to further extend your retirement savings. Also inquire about 401(k) plans at your work place.
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