Monday, September 21, 2020

How to manage your personal finances? Budget and savings

All kinds of expenses can come in life, some very pleasant or sudden like trips, others that are expected as the arrival of a child or others who put pressure on the wallet as a break in the car.

Managing your personal finances properly helps to deal with these unexpected events. However, effective management of emergency situations starts upstream of unexpected events. Discover some of our tips for having a healthy management of your personal finances.

Make a budget: an essential step in managing your personal finances

Make a budget: an essential step in managing your personal finances

It would be difficult to understand your financial situation without knowing how and especially where your money goes. The purpose of your budget is to determine an amount of expense that is either equal to or less than your cash receipts.

Start by making a budget by a period of one month, the one that just passed and the one to come. Write down all your cash entries, from work or allowances. For the past month, you should keep all your bills and write down all your expenses, even the small ones. This will give you a general picture of your personal finances and your monthly expenses. You may have surprises. 

In addition, all the expenses do not have the same importance, you have the essential expenses like the rent, the transport or the grocery store and the expenses for desires, like the restaurants, the outings, etc. You must redo the calculation until everything is balanced without cutting all the pleasures. You can then make your annual budget and have a better overview on managing your personal finances. However, a budget is only useful if you follow it, pay attention to temptations.

The savings ABC

The savings ABC

Saving is essential to effectively managing your personal finances. To save is not to deprive oneself, it is to set aside for more opportune moments. It holds an indispensable place in your budget.

First, you have to put a place a fund of urgency. It is a first step towards sound management of one’s personal finances. This fund represents enough money to hold 3 months of expenses. This can be used for major contingencies, such as when a job is lost. In addition, it must be easily accessible because it must be usable in case of emergency. Placing the funds in a savings account is a good idea.

Secondly, when your emergency fund is in place, you should try to systematically save on your cash inflows. Financial advisors offer an ideal of 10 to 15% of your income. However, any amount is better than no savings. A mere $ 10 a week can produce impressive results after a few years.

What to do in the case of unforeseen events?

What to do in the case of unforeseen events?

The unforeseen events of life can not all be planned within the limits of a budget. However, when the situation is unsustainable, do not stay alone with your financial problems. Good Finance loans can help you get out of a bad patch and you lend money fast. Do not hesitate to contact us for a loan request.

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