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Personal Finances

6 Tips To Control Your Personal Finances

The world of personal finance can easily seem overwhelming, even to those who already have experience with bank accounts and paying bills.

Wouldn’t it be great to have a magic formula or a simple and quick solution to never have to worry about your money again?

Unfortunately, you can imagine: that such a magic formula does not exist. But there are still several simple actions and tips to improve your personal finances.

With a good strategy, a little curiosity, and a knowledge of the basics of finance, anyone can change their relationship with money and keep their expenses under control.

Establish A Budget

To do this, go back to your bank statements over several months to identify essential costs such as rent, electricity, savings, credit, transport, and insurance. Then do the same thing with the expenses dedicated to food. Finally, point to all your other “non-essential” cash outflows.

Target Your Priorities

After having established your budget, it is a question of managing it. Since you have counted your food shopping, this may also be an opportunity to change your habits to be more efficient and economical. Similarly, to please yourself without ending up in the red, learn how to spend better by comparing prices and distinguishing between want and need.

Optimize Your Means Of Payment

Several tools can help you manage your expenses. With a tight budget, it is, for example, not recommended to multiply checks, the late collection of which can quickly put you in difficulty. As for your bank card, you can prefer it with systematic authorization to prevent any risk of overdraft or at least with an immediate debit to have a constantly up-to-date account balance.

Conversely, deferred debt can allow you to delay payments until your paycheck since all transactions are debited on the last day of the month. But your salary must still be paid before the 30th or 31st and not at the beginning of the following month.

Be Curious About Your Personal Finances.

The world of finance can seem as boring as a game of Scrabble on Sunday afternoon at Grandma’s. But that’s because it’s often misunderstood.

We tend to see managing our finances as complex mathematics and paying bills. However, learning how to manage your money is much more about giving yourself the means to achieve your dreams without (too) worrying about money or achieving financial independence, which is valuable for your personal development.

The main problem for people who can’t save money is a lack of financial education. We are not taught how to properly manage our money at school, which is a shame.

Once you understand that managing your money is about empowering yourself to achieve your dreams and plans, you’ll want to do that much more.

Start Setting Aside As Soon As Possible.

Thanks to the magic of compound interest, the simple act of putting aside earns you money.

The sooner you start saving for your goals, the better the return on investment will be. Although it’s never too late, starting to plan for your future as soon as you enter the workforce offers real long-term benefits.

Learning to put aside as soon as possible also opens the doors to new financial products such as investment.

Think (Really) About Every Expense

A takeaway meal when you get home from work because you’re lazy to cook, a monthly subscription that you’re slow to cancel. You often don’t realize the impact of each “small” expense on your wallet.

And that’s the main problem: it’s hard to change things when unaware.

Follow Up

Without necessarily having your nose in your accounts at all times, take advantage of online banking services to keep an eye on your transactions and program reminders in the event of a low balance or a large expense. In this way, you can anticipate overdrafts.

Generally, it is wise to stick to a small regular point of your expenses when doing your accounts. Most banks also make it easier for you by allowing you to categorize your costs as you go along by theme (housing, food, leisure, health, etc.), then display a summary on a dashboard.

So sit down for a few minutes, and take the time to build an accurate budget. Define how much you will be willing to spend this month for each category. This ranges from going out with friends to shopping for new clothes.

Then, once in a situation of temptation, the decision will be easier.

Plus, you’ll easily see where your money is going and which category you could cut your expenses.