manage your finances

How to Properly Manage Your Finances?

Financial management is an important issue that is relevant both globally – at the enterprise and personally. If a headless leader is at the helm of the company, who is completely unable to correctly distribute financial flows, then sooner or later the quite expected result will come – bankruptcy.

People always strive for a better lifestyle. It is as natural as a blue sky with clouds. It doesn’t matter who you work or what you do, money is always a privilege. Even if you served in the army or are going to master this difficult path of service. They pay really well there! Joining the Armed Forces connect you with a rewarding career. You’ll need to put in a few years to earn higher pay. Military base monthly pay is determined by your rank and years of service. Here is the best paying job in the military, which can help you to choose the most appropriate position for you.

The United States Government pay scale determines the salary ranges for workers in most technical, administrative, clerical, and professional civilian positions. The numerous agencies within the government determine the GS level of pay that applies to their job positions. So, you can find the Federal Pay Scale for 2021 on this site:

So on a personal level – no matter how much you earn, if you do not know how to control your income – expenses – savings, then the result will be just as deplorable as in the first example.

It is worth considering one simple dogma, which will help to properly distribute your money:

Your income is the main base of your expenses and an indicator of how skilfully you manage your cash receipts.

And one more important point. Many people, when you ask them a question about how they manage their finances, answer that in principle they have nothing to manage, and they will think about it when they receive a large amount. It is this delusion that leads to constant poverty, lack of money and a monthly run on friends with a request to borrow money until payday.

It is important to know: you always need to manage finances, regardless of their quantity and frequency of receipt.

financial management

Simple Rules for Managing Your Finances

Reduce your expenses

This article tends to grow and grow. But with skilful planning, it is quite possible to reduce it by half or more. At the beginning of the month, make a list of your mandatory and non-essential expenses, and group them by definition. According to statistics, any of the received points can be cut without lowering the bar of your usual lifestyle. For example, to begin with, give up the empty time in a cafe every night, you can drink coffee with friends at home, in a more comfortable environment.

Define financial goals

Take time to write your financial goals. This could be long term, such as a quick retirement, traveling around the world, or buying a home. Or short-term: loan repayment, purchase of a computer or vacation abroad. All of these goals will affect how you plan your finances. After all, having a goal, it is easier to collect money.

Break down long-term goals into smaller ones, then it will be easier to achieve them

Once you’ve written down your financial goals, prioritize them. This will ensure that you give the most attention to the ones that matter most to you. You can also list them in the order you want to achieve them.

Develop a plan

You already have financial goals. Now you need to understand how to achieve them and planning will help you with this. The plan should contain several steps and certain milestones. For example, if you are collecting 10 thousand dollars, then define several dates by which you want to collect 2 and 5 thousand.

Create an emergency fund

This is the money that will keep you going through tough financial times. With it, you will feel more relaxed and confident.

In planning, you also prioritize your financial goals. When deciding on a short-term goal (travel, buying a refrigerator), always keep in mind your long-term goal (securing a pension, buying a house).

Stick to your budget

Your budget is one of the key tools. It is he who allows you to create a spending plan so that you can distribute your money for various purposes.

Reward yourself for achieving small goals. It can be a trip to nature, your favorite restaurant or a movie. Or take a day off at home so you don’t waste money.

You can write down your budget in detail, determine how much money you need to save. This will show you how quickly you can reach your goal. You will see unnecessary expenses that can be avoided without changing the quality of life.

Keep track of your expenses. There are many smartphone apps for this. Or use a notepad or Excel.

Pay off your debts

Debt is a significant obstacle for many when it comes to achieving financial goals. This is why paying off debts should be a priority. Create a plan to pay off debt faster. For example, by making the minimum payments on all your debt accounts, pay more money on one debt with the largest interest in addition to pay it off faster.

Find an additional source of income in paying off debts. This can be selling unnecessary items or working remotely with a low load. Also try to keep your costs down.

After you have completely got rid of debt, try not to borrow anymore. Prefer debit cards over credit cards. Fill your reserve fund so that you can turn to it, and not to your creditors, if necessary.

Increase your savings

When you have managed to pay off all your debts and even collect certain savings, think about increasing them. This can be done by investing. It is worth investing the money that you have collected for a long-term purpose in investments, because income from such activities cannot be obtained soon.

Find the strength to fulfil your plans and invest in the size of your family budget, taking into account all the cut-back items of expenditure. At the end of the month, you should take stock and see how much you were able to reduce the amount of spending, and how much you left in the balance. Now you can start all over again and reduce the amount of spending a little more, and so on until the level of your finances, which remains from the monthly income, will not satisfy you with the number of zeros.

A good incentive to properly manage your finances can be the thought that your income is your prosperous (or not so) future.

One big mistake is very common, which is made by people who have already tried to implement these simple rules of financial management in life: when they see the amount that they have managed to accumulate, they start to feverishly figure out where to spend this money. The ideal option is the same account opened with the bank, where you deposit amounts of money every month.

On the one hand, you will protect money from yourself, because you will be subject to penalties for early termination of the contract.

On the other hand, you will provide financial protection for your family and gradually create for yourself one of the sources of passive income – you can call it a private pension. The financial instrument of endowment life insurance, combining accumulation and protection of life and health, is considered the most reliable tool in the world for saving money. Thus, you get into your hands another effective method of managing your finances – protecting your family, passive income and a partially secured future.

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