Are you tired of worrying about spending? Is your personal budget up to date? Do you know the net worth of your assets?
How to better manage our money? Highlights of 2020
Is your monthly cash flow positive or negative? If you answered no to any of the above questions, this article can help you better manage your expenses. Learning how to manage your capital requires effort and time. If you are reading such an article, you have taken this step.
Money management has 10 steps. After following these steps, you should get a clear picture of your personal finances. After completing these steps, you will be able to make the necessary changes to achieve your desired financial freedom.
How to better manage our money.
Before we get started and delve into the basics and details of this, it’s a good idea to make a few points about money management.
It seems like a good idea to review quotes from some personal budget planning experts around the world.
Know your financial goals.
One of the most important steps when it comes to managing money is knowing your financial goals. We can provide you with all the shortcuts you are probably looking for in finance; But if you do not have clear financial goals, you can not tell which solutions are useful and which will divert you from the main path.
Are you planning to retire early? Do you have installments and debts? Do you have a child and want to pay for his / her university? The details of money management in the third decade of life are very different from the seventh decade.
Depending on your situation and goals, the calculations you get along the way will yield different results.
Have a possible path forward.
The details of your next steps in having a specific strategy for your personal accounts will depend to a large extent on the outcome of the actions that we will outline below.
However, in general, it is better to be aware of all these steps and books to get a more comprehensive picture of the tips needed to manage your money and property.
Do you want to repay your installments first, then save for retirement and finally repay the loan? Or are you planning to buy your own home first, then installments and finally retirement savings? Our advice is to set your priorities first.
Keep your motivation and enthusiasm.
Keep in mind that if paying your installments is a big part of your financial management strategy, you are not alone, and so are many people. You must be prepared to face the problems ahead; Of course, sometimes these problems get a little too long.
Do not forget to check in front of things after each step and reach any result (even if paying an installment worth one million Tomans). By doing this, you will be on the right track and progressing.
All you need to do to get the most out of your financial management is motivation.
Recognize your weaknesses and do not hesitate to seek appropriate help or advice.
It is okay that we are not all inherently accountants, bank investors or stockbrokers. Most of us have a laid-back attitude when it comes to painting a picture about retirement. If you have trouble deciding on the best path for you, consider hiring an expert to help you manage your finances.
Maintaining pride and struggling financially alone, without sufficient knowledge, is the last thing you want to do. The unfortunate consequences of this will soon lead people to realize the big mistake and waste their time.
Use the tools you need and, if necessary, think of new tools.
Of course, there are different tools and methods for cutting a piece of wood; But everyone has to choose the right tool for their situation.
You may be in favor of traditional methods and the use of pen and paper to record your finances. You may also be looking for new and more complete tools such as related programs and websites.
Some things need to be done in more specific ways. Although the use of pen and paper will be enough for budgeting, if you are one of those people who want to use a method beyond writing on paper, you need a modern tool: a budgeting application that is always on mobile and Keeps an eye on you and let you know about your financial changes.
If you do not want to work with financial experts to manage your money, accounting software will probably help you. Persian versions of this software can be identified and accessed with a simple internet search.
How to manage your money.
Well, now that you know almost where you need to go, let’s tell you about financial management strategies. These strategies have a very simple approach and you can easily follow them.
1. Make a list of your assets and liabilities.
Assets: Write down all the things that are valuable to you in this list. This list includes bank accounts, savings, retirement, car or other vehicles, bonds, stocks, annuities, and home assets.
Debts: Keep track of all your debts. This list includes student loans, mortgages, car loans, personal loans, as well as any type of debt to others.
If you are new to money management, the use of paper and pen will be very helpful. Keep the list simple. Write the sum of the total amounts and the title for each section. In this section, you can use the Excel program or free related websites (for this, you can still search the Internet).
2. Calculate the net worth of your assets.
Some people find it difficult to calculate the net worth of an asset. In fact, it’s one of the simplest steps you can take to begin the process of preparation for mediation. To do this, subtract the number of liabilities from the assets to get the original number (debt-assets = net worth).
Again, using pen and paper is a good way to do this. If you use Excel, you can easily give it a simple formula to calculate this number for you.
3. Set a monthly budget: Revenue versus expenses.
The first two steps give you a good idea of your personal finances. Based on the results, you will find out how your financial situation is going in general. This is a very important point. Checking your monthly cash flow is just as important.
Income: Make a list of all your monthly income and earnings. This list includes hourly wages, salaries, bonuses, extra income, extra jobs, and the like.
Expenses: Keep track of all monthly expenses. Consider fixed costs, such as rent, mortgage, insurance, student loan installments, internet, sports club fees, and other similar fixed costs.
Because these costs are paid on a monthly and regular basis, they are easier to identify. Now write down the variable expenses: water, electricity, gas, mobile and landline bills, groceries, non-essential and entertainment expenses, the expenses you set aside for charity, and other similar expenses.
It may seem difficult to estimate some costs on a monthly basis. Look at the past few months and consider the middle ground. Achieving a clear picture of monthly expenses is essential for managing money and considering the necessary budget.