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Effective and Quick Personal Finance Management

The most important part of managing your money is keeping track of your personal finances; the more detailed this is, the better you can stay within the lines of your salary and investments. This is difficult and intimidating for many people, but here are some easy and quick starter tips for you.

The first step is to create a budget. Write down your biggest and most important expenses first; a mortgage or rent, any vehicular payments, any other debt you are trying to pay down, particularly secured debt. Then write down your variable expenses, such as food, gas, cell phone. Then compare these against your recent expenditures- look at your checkbook, credit cards, debit cards if you need to stimulate your memory.

Using cash is often a very helpful way to limit your expenditures. With a credit card, it is very easy to spend more than you intended, but the more physical method of counting out individual bills and the limitation of not having any more cash on you than is in your budget will keep you from spending too much. However, it is very important to keep receipts when using this method of limiting your spending, because it is very easy to fritter away five dollars here on a coffee and six dollars there on a snack and not understand why you ran out of money at the end of the month, although with a credit card these expenses are easier to track because they will show up on the credit card bill.

Making a shopping list is very important to limit your spending on impulsive expenditures. Create a menu either in advance or based on sale prices, figure out what to buy based on that menu, and stick closely to that list. Similarly, when shopping for clothes, know what you need to replace, and purchase solely what needs to be replaced, instead of additional clothes that you will never wear. Don’t be tempted by a shiny new thing that you will never wear, or wear only once and never again.

Keep your bank statements and credit card statements. Keeping an eye on your bank balance is an excellent way not to lose a lot of money to overdraft charges and also an excellent way to motivate you to save more. Looking over the last 6 months of bank statements is an excellent way to encourage you to allocate your money towards savings accounts or money market accounts rather than spending it on little things that will disappear in a few minutes, like a coffee or a sandwich. Keeping credit card statements will also help you track where you habitually overspend, which will also allow you to keep track of your temptations.

Many people have trouble spending within their limits- if you are one of them, you are not alone. However, if you keep track of how and where you are spending your money, you can spend it in places that will give you more overall satisfaction than just the transient satisfaction of a soda.

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