Unless you manage your finances responsibly, sooner or later you will be caught up in problems and inability to pay for the received obligations.
It is expected from all of us to be able to responsibly manage the money we earn, but the thing is that nobody actually teaches us how to do it.
Here are some tips and tricks how you could start saving more money and invest it later.
The first important thing you need to know about the budget is that it’s not all about how much money you have. It’s very important what you do with him! Even simpler – the idea is to spend less than you actually have.
To determine how much you know about this, ask yourself a few things, such as:
- How much effort are you currently investing in managing your money?
- Do you enroll your monthly expenses?
- Do you keep track of how much you spend each day?
- Do you often spend on things that you do not need?
- Are you self-organized and willing to change your habits?
Find out how much you spend each month and on what
To improve your budget management, it is recommended that you first get a pen and a paper (or even better – open excel or phone notes and keep your tracking there).
What you want to do is combine the income and expenses that you have. You probably know how much you make each month. The question is, do you know where your money goes?
First of all, start recording all the expenses that you have. The easiest way to collect information about all costs is to save all receipts for one month.
Card payments are very useful in this case because you can always simply request a report on monthly changes in your bank account.
Make a budget for all types of spending
The easiest way, to begin with, is to write down the costs you have for each and every month, fixed and slightly varying, such as rent/apartment rate, money for credit, electricity bills, water, telephone, internet, cable television and so on.
For those like electricity and water, always add 10% to make sure.
More simply, for this type of cost, you can activate payment through a permanent order, which can save you time as well as taking care of whether your invoices are paid on time.
Separate your desires and needs
To balance your spending, you should separate needs from your wishes.
One of the most common ways of excessive money spending is so-called impulsive shopping. You need to think about the differences between needs and desires at every purchase.
Even if you conclude that buying a car is a more profitable option than using a car or taxi service, it’s not the same whether you will buy a sports car or a small economy car. It is a relationship of desire and needs.
Do you really need the fastest possible Internet and TV of huge dimensions? Make a list of big purchases so that you do not buy impulsively. To manage the budget well, you must first meet your needs and then think about your desires.
On the other hand, millionaires are most often known for good planning, wise spending of finance and a careful saving of money.
We also think that they live a healthy life, look after themselves and continually educate themselves.
Nevertheless, it is not always like that and we are familiar with cases of errors in this field.
These are the most commonly bad habits that left the millionaires squandering.
They did not track their expenses
Whether you are a working for a low salary or making millions each month, you need to have your budget and you need to track each dollar. The Entrepreneur advises you to take special care of small things that you do not even remember paying.
They are serious consumers of the budget and there are more of them than we think. When the bill of millions of people begins to decline, they are not aware of it or checking their state.
They most often do not know how to tell you what they spent on everything.
They do not check if there were any illegal transactions, as well as lunch, hotel or night out bills.
They never compare prices and do not think how much it costs because – they are millionaires.
Initially, this is attributed to money dangers and we do not see it as a problem, but if this behavior gets worse, bankruptcy is close.
Real expensive and emotional shopping
They are very prone to emotional purchases.
For example, when they are unsettled and have a bad day, they are able to go to some online site and buy an incredible amount of things. They slowly start treating shopping.
If they are lazy they will go to the most expensive restaurant for lunch so they do not cook.
However, those who have the intention to remain millionaires are economical.
Let’s remember how MS Hammer bought a golden door frame with a quote and a 21st racing horse. He spent over $ 70 million in a short time.
There is also well-known case of 50 Cent who had a debt of 23 million dollars.
They did not have multiple incomes
A study that lasted as much as five years, and has dealt with millions of people around the world, has shown that millionaires mostly had several income channels.
Even 65 percent had three flows, and 35 were four.
However, there are those millionaires who do not have this case, and one of them is a Brazilian businessman worth 35 billion dollars. He considered that nothing could jeopardize his empire of fuel.
When the price of oil fell, he went bankrupt because he did not expand his business. When you have multi-party money, it creates security for you and ensures you.