Managing personal finances represents a big problem for many people today. Few are experts in their personal finances and don’t know why they are spending more than they earn.
Whether you want to travel, buy a new house, a car, or invest in your education; Not having precise knowledge of your finances can stop the execution of your projects.
In today’s world, with so many new products prompting us to spend our money, it becomes even more important to learn techniques to effectively control our capital.
Good money management is a fundamental requirement for an entrepreneur; since it gives you the bases to intelligently convert a resource (economic in this case) into something that generates value; either for his personal or professional growth.
As in any discipline, you need to study and acquire new habits so that your finances allow you to achieve the goals and dreams you want.
Here is your first lesson if you want to be an expert in your personal finances:
Lesson #1 to be an expert in your personal finances.
Know your expenses.
Easy right? You probably already knew this and it is logical that you should know your expenses; but do you really know them exactly?
It’s amazing how most people know their income, but they are completely unaware of the exact value of their expenses.
This includes basic expenses, not just food and housing, but also entertainment, vacations, bank obligations, and so on.
How to know your expenses.
Make a weekly list of your expenses that includes the following:
- Saving
- Transport.
- Feeding.
- Living place.
- Debts.
- Services.
- apps.
- Entertainment
- Cinema.
- Restaurants.
- Parties.
- etc.
It is somewhat finicky but necessary to start successfully managing your finances. Since this way you can identify money leaks.
To start, use an excel sheet to keep track of your expenses per week. You can complete it daily or at the end of the week.
It is important that you schedule a certain time and day to do it; this way it will become a routine.
Take into account everything that takes money out of your pocket and includes the payments of your debts with banks or any entity to which you owe money.
At the end, include your income and note if you are spending more than you earn.
Review it during the week and especially at the end of the month and answer the following questions:
- Are you owing too much to the bank?
- How much is real value monthly that you need to cover the lifestyle you currently lead?
- Are you exceeding in unnecessary expenses?
- Can you save more?
Never forget that the only formula for creating wealth is to spend less than you earn and invest the difference.
Also read: How to make an easy and fast budget (Step-by-step guide).
Also read: How to make a simple budget using these three categories.
And remember, if you are really interested in creating your own business, you can purchase our book “How to create a company while working: Discover how to manage your time, manage your money and motivate yourself while creating a company and working for another” , where you will find all the information you need to found your own company, without having to leave your job.
