5 tips to control your personal finances
When I was in college, I fell in love with credit cards and graduated with an addiction. My habit was growing as earning more money. By the time I turned 30, had more than $ 35,000 of debt and a mortgage to pay. Eventually, I decided to turn things around. But this did not happen overnight; It took me several years to manage my money, and this was possible when I realized that I should try my personal finances as my business. It was not easy to bring the cold rigor of the cost-benefit to my daily life, but there are some tips what worked for me. I share five ways that you can also follow:
Monitor your expenses: When I tried your personal finance as your business, monitoring of expenditure was the first thing I had to do. I started writing all purchases made, no matter how small they were. I simply started writing things to use numbers to identify what my spending habits and expenses are?
Preparing a budget: Budgets allow you to use the monitoring information of the costs to plan for the future. Do not have to complicate a lot. You can use this simple formula of balance: 50 percent for needs, 20 percent savings, 30 percent for a wish. How easy is it? If your expenses do not follow this parameter, you must go to the next step.
Conscious spending: Trying this means actively choose where your money goes, just like you do in your business. Spending too much on the things you love and reduce costs in the less important things. This happens automatically in business, where you monitor you every penny you spend. It is less likely that people spend without thinking if you know you will leave a paper trail.
Take savings as profit: If we replace the word ‘savings’ for ‘profits’, the world would have a lot more motivated savers. Everyone knows that if a company spends more than it earns, you can not turn it into profit and business will die soon. The same applies to personal finance.
Value personal finance like a business: As you know the value of your businesses have a variety of financial indicators that allow them to know where they stand. There is no reason not to do the same at home; if you use a software to monitor your expenses, just about generating income sheet and income statement, that should be enough.