In most situations, people attribute their lack of funds with the thought that they don’t earn as much as they need. This, however, stops being true at some point. Sometimes, your income will not be the reason you are penniless, the blame on this will fall on your expenses. In order to prevent this from growing into an even bigger problem, you need to keep track of every single dollar you spend. Here are few tips that will help you handle your finances like a professional accountant would and in this way significantly improve your financial situation.
Set a Budget
First of all, at the beginning of every month you need to have a budget plan. For starters, you can list all your monthly incomes on one side. This usually means your pay-check (from one or multiple jobs), stipend or in some cases even allowance. Once you have this established, you need to make an estimation of all your expenses over the following month. Here, you need to consider things like rent, fees and bills but also money you spend in groceries. Sure, it is impossible to be 100 percent accurate here but you can make a rough estimate around which you can make further moves.
After you have your estimate, you need to find a way to track your expenses. At the end of the month, most banks send you a report of your credit card expenses, which covers you on this end, but what about cash. Well, nothing prevents you from keeping a record of your expenses in cash on your own. Simply purchase a notebook or even open a sheet in Google Sheets or MS Excel. For those looking for something even more efficient, there is always an option of looking for a finance app. Sure, there will be some discrepancies, but this will at least give you some insight on where all your money went. Based on this, you will get a chance to improve some of your worst financial habits.
Find Cheaper Way to Do Things
One of the best ways to become financially responsible is by pinpointing all the money you waste on a monthly basis. We are not talking about ordering that extra pizza you didn’t need or going out one time more often than you should. Even though this kind of behavior may cause you a financial problem, this is money you spent on your enjoyment and as such can never be considered as wasted. What we’re talking about is a genuine waste of money like what you pay in transaction fees.
A lot of people pay their rent through the bank and these fees can easily add up. This is why you need to ask yourself: “is there a less expensive way to pay my rent?” Paying your rent through specific platforms can save you quite the amount. In fact, it’s even cheaper than paying for a cab to take you across the city in order to give the money to your landlord in person. The best thing is that this trick is not applicable only when it comes to rent. There is always a cheaper way to do thing and all you need to do is identify it.
Show Some Restraint
Previously we mentioned that spending money on yourself cannot be considered a waste, but leading a more luxurious lifestyle than you can afford is never a smart long-term decision. Sure, you may feel that this particular sofa you saw at the furniture store is exactly what your home needs, but is it worth borrowing or indebted yourself to acquire it. Without some personal restraint even the best financial planning won’t do you any good. The fact that you are spending less doesn’t mean you have to give up on absolutely everything you like. It is completely possible to maintain the same lifestyle quality while spending less.
With just these few steps of precaution, you can improve your budget significantly. As a result, you will feel like you had an additional source of income while working same hours. It is like having your cake and eating it too.