5 Personal Finance Tips To Better Manage Your Money

personal finance

Galloping inflation, unemployment, low purchasing power: if we take into account the grim picture drawn over the years, we will think twice before blazing our personal finances to find ourselves dry in the middle of the next month. Without spending control, financial trouble inevitably ensues.

1 – Make a budget (weekly or monthly): the first financial planning tool

Mismanaging your personal finances (always) leads to disastrous consequences. This attitude can generate in the individual the feeling of being in permanent need, while his financial situation deteriorates.

Budgeting on a weekly or monthly basis will allow you to see very clearly where your money is going and for what purpose. The budget will alleviate the overwhelming urge to buy sometimes without necessarily being in need. A budget will help you make informed choices and set your priorities.

2 – Establish priorities because your money is limited and to avoid financial trouble

Priorities vary from individual to individual, from family unit to family. They take into account the real needs expressed. This requires an awareness of marital status, social position, your business plan; provide an overview of your (short-term) goals and the tasks to be accomplished. Alongside your basic priorities – water, electricity, food, housing and health, rent, insurance, transport), it’s up to you to prioritize your needs in order of importance or urgency. 

3 – Learn to differentiate the essential from the desirable

The main thing is everything that is of the order of a primary need to be filled, everything that is necessary, what is most important – the bills of water, electricity, rent, among others. Those who are satisfied with the “strict minimum” would say, for example, that offering a cocktail dinner in a chic restaurant, going to the sea or traveling twice a year are not of the order of the essential but of the desirable.

Desirable is anything that inspires us to desire, such as wanting to buy new, state-of-the-art appliances or electronics (when you already have them). Financial planning helps keep these separate; make a budget and learn to stick to it.

4 – You have to save for better personal finances

Save your money for bad days, says this Russian proverb. In a country where citizens find themselves exposed to high risks of accident, illness and insecurity on a daily basis, saving is an effective way to cope with the vagaries of life and prepare for retirement. Saving is a part of one’s income that one saves so as not to fall into the trap of consumer spending. Saving can be cash put aside, but it can also take the form of an investment or an investment which can give quite the boost to your personal finances and assets.

5 – Don’t let money lead you

Many young people, diplomas in hand, are looking for employment. Once hired, most of them devote all their time to it, without much personal development efforts. In addition, the economic conditions are so difficult that some are driven to the frantic race for money, ignoring everything and especially what can really fill a person. Maintain financial balance by prioritizing the essential over the desirable (see tip 3), without falling into greed.

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