Are you planning on financially securing your family??
No matter how more or less you earn. If you have a perfect plan on how to manage your income you are never going to run short. Money management is essential for both present as well as future. We earn and spend on daily assets and save money after retirement.
Managing money is equally or rather say more important than earning. And so we invest or save money in different ways like – insurance, stock market, etc.
Well if you are a beginner then these are the tips you must know for financially securing your family.
1. Learn, Understand and Set Priorities
This is the most important thing you should know before you start budgeting. People who know what is and is not necessary automatically save money. If you keep spending on things out of your priority list you will run short when it comes on spending onto your priority list.
Some people think – Let me spend on this now, later I will think about how to manage other things!
Are you the one who gets the same thought when you probably window shop or see offer boards?? If so you are the one who always runs short of money when you need it the most you need to channelize your money habits. Focus on what is important and learn your need.
So the next time your eyes get caught by an offers board or sale ask yourself –
Is it important? Do I need it? And is it on my priority list??
If NO take a turn and see you will never run short.
2. Determine and List out – Your Daily, Monthly, and Year Expenses
Remember “If you can measure it, you can certainly manage it”.
There are few expenses you spend on daily, a few weekly, and some monthly or sometimes yearly. But can you manage money without knowing how much amount you have to plan for??
Of course not, unless you are a freelancer and have fluctuating income. If you have noticed your priority list you will find out your mandatory expenses. You cannot cut off from basic expenses like food, electricity, etc. And so these are your mandatory expenses.
What you have to do is using an excel sheet or simply use a pen-paper to make a list of your expenses. You can refer to credit card statements, utility bills, ATM withdrawal, and bank statements, etc.
Once you know how much amount you need on daily, mostly and yearly basis you save that amount from your salary. This way you will never face a shortage of money.
3. Set a Limit for Unbudgeted Spending
You also need to plan on the amount left over after subtracting expenses from the total income. Of course, you can use the leftover money for fun or entertainment purpose but there again need to be a limit to it.
You can plan on saving the money or later plans, you even can plan on investing the money to get a better return like FD (fixed deposit).
Saving money by investing it in a way that will benefit you later in the future is the smartest way to deal with and manage leftover money.
Avoid indulging in policies where you do not get access to your money ones invested for the certified period. This will make you fall into a situation where you have money but you have no authority to use it.
4. Practice Saving Regularly
Consider some amount of your total income as your saving amount. For better management set it to automatically transfer the saving amount from your checking account to your saving account.
A saving account is like a B-plan. If your planning fails or your run short of money or there is any medical emergency you will always have a saving account as your backup plan.
5. Daily Money Minute
This is something I would surely suggest everyone follow daily, whether we are planning on money management or not we all should daily sit for a minute and note down about money matters we had the entire day. You paid, saved donated, or lent should he noted down so that you will always have detailed knowledge of incoming and outgoing cash.
As financial expert Dave Ramsey says,
“You will either manage money or the lack of it will always manage you.”
Yeah sometimes you may still lack in your planning and fall out of track but that is ok. As long as you have good financial habits it will never affect your future financial security. Money is the most integral part of everyone’s life –
You have a poor income or you have rich income financial planning is a must.
Hope you found this article useful. Thanks for reading!
