How To Manage Personal Finances

Many youngsters go out of their town to work, making the whole world (in a microcosm, India too) one small world. They all leave the comforts of their homes and travel to places that they may have never seen or located on the map and end up fending for themselves throughout. Loneliness and homesickness, combined with the ultra-consumerist lifestyles led by people today makes them make some very rash expenditure, which they often regret later. Some of them consume alcohol almost every day and end up spending money on it rashly, which is only one of the worst possible cases. Women may take to rash shopping or such acts, which later puts them into debt and pushes them into reconsidering the lifestyle they have been leading. Does all this sound familiar to you? Are you also a yuppie in debt? The only way out for you is to keep track of your expenditure and to use your money wisely – in short, it is best to maintain an account of your daily expenditure or like a personal account. Here’s how to handle personal finances.

 

Tips To Manage Your Personal Finance 

Here’s how you can keep a track of personal finances:

 

Personal Account Statement 

It would do you well to create a personal income statement, either on paper or by making a Microsoft Excel Spreadsheet on your personal computer. For the uninitiated, an Income statement is usually used for tracking a company’s profit and losses; but you can use to keep track of your daily income and expenditure. Such an exercise will allow you to see how much of the money you earn is being spent or being saved in a month. Also, in case you are in debt or have to repay a loan to your bank, then this is the best way to keep track of how much money you can save to repay loans and debts. Also, if you are seriously in debt, you will realise how it happened and you may try to figure out ways to get out of it.

 

Spend By The Month 

Now that you know how much you spend out of what you earn, make a monthly budget of how much you shall spend on each of your necessities as well as luxuries. Such an exercise is especially important if you are going through a rough patch financially. The rules of this game have not changed at all since the good old days, you never spend more than you earn. From your earning, take away the fixed monthly expenses then set aside a budget that you can spend and stick to it – and if you are in the position, save some of it by say, cutting down on your cigarettes, eating out, or such wasteful expenditures.

 

Save Me More 

Though it may be difficult to begin with, it is best to keep aside a small amount of money for your savings especially when there are so many ways to accomplish this. One option for you is to open another account, preferably in another bank, and make an arrangement in such a way that the bank automatically deducts 5% to 10% of your monthly salary and transfer to the savings account. This would also means that you will make a budget from what's left of it.

 

Outdo Yourself 

It is perfectly fine to set financial goals and try to meet it. With each passing month, try to outdo yourself – after you have paid off all your debts and loans from various banks. This way you will be able to save more and spend less, which will also help you set some money aside for anything that could be more important and costlier. There may be times when you might need extra money to travel to some place, go back to your parents, or you may want to improve your lifestyle later. For all such purposes, it is best to inculcate in yourself the habit of savings.