Buying real estate, saving for your children’s education, redecorating your home are just some of the reasons to start managing your budget more wisely. Here are some tips on how to manage your finances the right way.
Keep track of your accounts
Only regularly checking your accounts allows you to know how much is left to spend before the end of the month. You thought you had enough to buy this next-generation coffee maker but forgot that a direct debit was waiting to be debited? It is by tracking all your accounts that you will avoid unnecessarily and challenging allow expenses.
Know your fixed expenses
Every month, your salary is paid into your account! But from day one, this amount is already reduced by your monthly fixed expenses.
What we advise you:
Take stock of your regular income and expenses over a month such as:
Fixed charges: rent, water, gas, electricity, heating, taxes, tuition fees, insurance, monthly loan payments.
Current expenses: food, maintenance (housing, car), health, transport, fuel, telephone …
Occasional expenses: household equipment, gifts, vacations, sports, leisure …
Set a budget
A vacation abroad, a new computer, a pair of trendy sneakers … Whatever your goal for the next few weeks, you can achieve it! Give up your morning coffee at the counter, opt for carpooling to reduce your gas costs, bring your lunch box to the office rather than buy your meal at the local bakery: these are some small sacrifices that you will be happy to accomplish to realize your project, the one that is really close to your heart!
At the end of the month, compare your income and expenses to your estimated budget. If you exceed it, readjust your expenses the following month. By balancing your budget as well as possible (income higher than or equal to expenses), you will be able to build up savings and consider new projects with confidence.
Start saving ASAP
At any age, it’s essential to save. Depending on your income, saving each month makes it easier to deal with the unexpected and to plan a few large expenses more easily. Of course, the amount saved each month depends on income but also expenses. If you are making debts just to keep up with the Joneses, there will not be much left to save. Also, it would help if you started saving as early as possible. Or at least start planning carefully. It’s always advisable to put your savings on autopilot and debit your income account for even the smallest monthly amounts. Also, for each unnecessary and impulsive purchase, you kept back yourself from, set aside that amount on your savings account.
Invest in financial markets
Finally, you need to start thinking out of the box and make your money work for you once you achieve some savings milestones. Investing in rental property is what comes to most people’s minds. And it could be a good option, but there are also cryptocurrencies, stocks, or contracts for difference trading. If you stumble upon a Forex broker who offers multiple asset classes and CFD trading and aims to open an account, you can seek advice from your account manager. Also, make sure you understand what you are involved in. Therefore always prioritize brokers who offer demo accounts and free education about trading and investments.
Planning, budgeting, saving and investing are at the core of your personal finance strategy. To achieve your financial goal, you will need strict discipline and a change in your consumer habits. But always remember that planning and taking the small steps today is already an essential milestone towards your financial stability and freedom.