Finance Life Style

7 Steps How to Manage Your Personal Finances Better

Personal finances can have quite the effect on human relationships. Blow your family’s savings and your spouse would probably not think twice before leaving you. Such is life. Yet, people struggle to handle their expense on day-to-day basis, which often puts them in some form of financial turmoil.

Thankfully, we are here today to offer you 7 simple ways of managing your finances much easier. It takes only a few minutes to read our proven strategies, but the effects of your decision to be a conscious spender could have life-lasting effects. Let’s get to it.

1. Keep Track of How Much You Spend

The oldest trick in the book is to be on top of how much you spend. This doesn’t mean to turn into a skinflint and fret over every penny you shed out of your wallet, but the practice could help you get a clear view of how much you spend every month.

Now, some people often get dispirited when they see how much money they have been spending, but make sure to differentiate between actual finances and emergency finances. Moving into a new place would probably mean that you have to buy quite a few things.

Buying yourself a new gizmo that you need, such as a dedicated computer for work, should also be featured on your list of expenditures, but this wouldn’t constitute the actual expenses.

2. Decide on a Budget

Once you have an actual budget on your hands, you can start making conscious decisions. There’s a thin line between cutting yourself off because you don’t have the money and making good choices that will have good effects on you.

Are you eating too much fast food and drinking too much soda? Well, this adds up, and you might want to cut it out of your diet. If you are a smoker, you might want to try and smoke less. Before you know it, this will translate into better finances.

Are you looking to buy the next iPhone? Perhaps another brand will do, especially when you want to make sure the phone you are using is reliable, and not a quirky device by Apple. There are small expenditures that go unnoticed unless you keep a budget. Maybe you don’t really need to spend $4 on a Starbucks coffee, because for $10, you can make yourself coffee at home for a month.

3. Have Some Savings

Nobody can imagine themselves not having a penny saved to their name after years in the work force, but it happens. And it happens mostly because people tend to be frivolous with their finances. When you are lucky enough to live rent-free or have good shared accommodation, the expenses seem low, and you definitely can spend a little more on yourself.

If you’re a home owner, you shouldn’t consider your house as a savings account, you don’t want to sell just to be able to afford to live. Just because your house price is going up it doesn’t mean you have more money to spend.

You need actual savings in the form of a savings account. Savings aren’t just for rainy days like losing your job or an economic downturn, they also help with treating yourself now and again to keep you mentally healthy.

4. Save for Retirement

Now, retirement is a touchy-feel subject, I mean, if you are in your 20s, what good is having a retirement fund? Well, it’s the habit that counts. In your 20s, you would probably start moving around and travelling a bit more.

That’s totally cool, but saving a small percentage of your finances for retirement wouldn’t hurt. This could be between 1% and 15% of your income. The younger you are, the least you would probably spend, but things will get a little more urgent when you are in your 40s.

5. Don’t Save on Healthcare

Healthcare can be quite expensive and so can be dentistry. But here’s the thing about dentists – if you have regular check-ups, and even cough up for your plaque to be cleaned every once in a while, you will enjoy completely healthy teeth, which would translate into better savings in the long-term.

It does sound like the kind of thing you wouldn’t think to save up from, but doing regular checks will save you a lot of financial trouble later on. Yes, it is an expenditure, but it’s a good one. Plus, if you do watch out what you eat and brush and floss regularly, you might actually end up not visiting a dentist for a long time.

6. Study Your Hobbies

Many people think that having hobbies can be expense, but there are quite a few hobbies you can enjoy that won’t cost you a fortune. The best of these are outdoor activities such as running, cycling or hiking. In fact, these are free hobbies which are also great for your health.

If you’ve got a need for speed and want to fund track days out driving supercars then perhaps it’s best you keep that to a minimum as this is an example of an expensive hobby!

There are also indoor hobbies you can enjoy which you can also do at your own time such as playing game consoles. Or, if you’re not into that sort of thing, John Hubbard from says “you can enjoy the thrill of winning as long you as gamble responsibly and stick to your budget”. Subscribing to an online game would give you something to do for hundreds of hours in exchange for a minimal investment.

The trick is to find a balance, you don’t want to deny yourself interests and pleasure in life, you just want to make sure you can still afford to fulfil your home and work responsibilities too.

7. Cook at Home

Want to really save up on some money? Cook yourself at home. The truth is you can make some delicious meals and quite healthy at that. Why spend $40 on dinner when you can spend it on a grocers shop which would make you 3 meals for the price of one.

Cooking at home is cheap if you are careful not to waste. Keep the staple dishes of rice and pasta as sides, these are very cheap and easily flavored, just add a stock cube! Keep a supply of dark leafy greens in your store cupboard, you can’t have too much of that.

Then all you really need to worry about is the protein and that’s where the flexible spending can be. You can decide if you’re having a budget night or fancy splashing out on a prime cut of steak.

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