Grow rich with your own money; how to budget and save your income

Kennysplash

Verified member

Follow those steps to master your finances​

1. Create a budget​


First things first: create a budget if you haven’t already. Is it necessary? Are windshield wipers necessary in the rain? Trust me, you need one.

Creating and sticking to a budget might seem a little tough to achieve at first but it pays off in the end (no pun intended). Budgeting helps us see with clarity and full transparency our financial situation and this is of most importance for better managing your money.

2. Understand your expenses​


Ask anyone off the top of their head to tell you how much they spend a month on everything and they might not be able to do so. This isn’t rare.

Many people actually don’t know the total amount of expenses they generate on any given month. This is a problem but there is an easy solution for it. Here it is: for one month, keep track of all your expenses. Easy-peasy. Take all your receipts (groceries, restaurant bills, utilities, etc.) and look at your bank statements and add up all of your expenses. Remember to keep track of expenses paid by cash as well as credit cards.
  • If you end up with a negative number this means you spent more than you made. Actions to take? Reduce your spending and expenses until the total reaches zero.
  • If you end up with a positive number this is good (high five!) and means you spent less you made. Actions to take? You could increase your debt payments or increase your savings.
Once you understand your expenses and income and have a firm understanding of the money coming in and out of your life, it’s time to take some additional steps to best manage your money.
MoneyStrands


10 Essential Steps To Manage Your Money The Right Way​

by Javier Castillo | Jun 28, 2017 | Money Tips | 0 comments
10 essential steps to manage your money the right way - MoneyStrands

Bad money management. It sounds nasty and you probably want nothing to do with it.
However, a good portion of Americans don’t properly manage their money. Some sources report that Americans are pretty bad when it comes to their finances as compared to other developed countries.
Yet, there is hope for you if you find yourself among this group.
There are some great tried-and-tested strategies you can learn how to manage your money the right way.
Let’s take a look.
Having a sound money management plan can be the light at the end of the tunnel for people trying to get their financial life in order.
If you are like me and have several bank accounts, credit cards, an IRA, and the like, often times getting a grip and fully understanding your personal finance state might seem daunting and an uphill struggle.
But if you don’t take the proper steps to get organized and actually learn ways for better managing your finances, you’ll feel like you are swimming against the current.
Managing your money—like anything—takes time to understand and to improve on. And to master, it also takes commitment and a solid understanding of your financial situation. These are the first steps in effective money management.
Everyone and anyone who ever took control of their finances went through this; and getting your financial life in order, sooner rather than later, is of utmost importance.
Here are 10 fundamental steps to help you manage your money the right way:

1. Create a budget​


First things first: create a budget if you haven’t already. Is it necessary? Are windshield wipers necessary in the rain? Trust me, you need one.
Creating and sticking to a budget might seem a little tough to achieve at first but it pays off in the end (no pun intended). Budgeting helps us see with clarity and full transparency our financial situation and this is of most importance for better managing your money.
It’s the first step to help us pay off debt and start saving for future expenses such as a mortgage, a car, and your retirement. It’s what will bring balance to your financial life and give you peace of mind.
To begin, you will need to understand your expenses and your income to better manage your money. This is addressed in the following 2 steps:

2. Understand your expenses​


Ask anyone off the top of their head to tell you how much they spend a month on everything and they might not be able to do so. This isn’t rare.
Many people actually don’t know the total amount of expenses they generate on any given month. This is a problem but there is an easy solution for it. Here it is: for one month, keep track of all your expenses. Easy-peasy. Take all your receipts (groceries, restaurant bills, utilities, etc.) and look at your bank statements and add up all of your expenses. Remember to keep track of expenses paid by cash as well as credit cards.
The idea is to have all your expenses (both variable and fixed) accounted for to get a total amount. This will allow you to see the whole picture and know how to manage your expenses going forward. You will also want to compare your historical performance over time.

3. Understand your income​


Ask anyone off the top of their head to tell you how much they make a month and although they probably won’t tell you, internally they know. This is the difference between income and expenses, most people know their full monthly income but have less knowledge of their full monthly expenses.
Nonetheless, the point is to figure out your total expenses and subtract that from your total income for the month in question. Here is how the results should pan out:
  • If you end up with a negative number this means you spent more than you made. Actions to take? Reduce your spending and expenses until the total reaches zero.
  • If you end up with a positive number this is good (high five!) and means you spent less you made. Actions to take? You could increase your debt payments or increase your savings.
Once you understand your expenses and income and have a firm understanding of the money coming in and out of your life, it’s time to take some additional steps to best manage your money.

5. Slash or remove unnecessary expenses. Pay attention to how you buy things. Always resist the urge to buy what you don't need

6. Save 15 to 20 percent of your income. This will accumulate over time a d you will be surprised at how much you can gather.
 

Alexandoy

VIP Contributor
You are right that creating a budget can at least restrain you from senseless buying spree. When there is a budget you will be conscious of the amount of money that is outgoing particularly for the non-regular purchases of non-essential items. When there is no budget on my mind what controls my buying is my wants and desired while if there is a budget I am controlled by the amount of the budget. I got to know that when I started handling the weekly budget for the food in our home. That was when I retired from my job.
 
Top