There are many people who struggle when it comes to their finances and who have no idea how to manage their money. This can lead to all sorts of issues, from spiralling debt problems to reduced quality of life. By learning the ABCs of financial management, you have a far better chance of controlling your money and spending more effectively.
A is for awareness
It is important to ensure you are aware of your personal financial situation so that you can better control your spending. Make sure you are fully aware of your debts such as credit card balances and monthly payments. The best way to do this is to keep all of your receipts so you can collect a record of your expenses, whether made with cash or card. The more prepared you are to pay what you owe, the less stressed out you’ll be waiting on your monthly statement. If you find you are unable to manage repayments on your debts, don’t bury your head in the sand. Instead, speak to professional counsellors at places such as Consolidated Credit for further advice on debt management and credit counseling.
B is for budget
It is very important to budget effectively in order to rein in your spending and better manage your money. Knowing what is going into and coming out of your account is an important first step. Make sure you list your income and outgoings, as this will enable you to see at a glance what your disposable income is each month. Essentially, a budget is not just what you make and what you spend, that’s just the foundation. A budget is really the money you have left over after expenses. You can then ensure you do not spend more than you can afford, and even look at whether you can afford to put a little aside into savings or where you can cut unnecessary costs. An easy way to get started is to use a budget planner like the one on Money Advice Service for managing your money.
C is for consistency
It is vital that you are consistent when it comes to your financial management, which means keeping on top of your budgeting. Don’t just budget for a month or two and then give up, as otherwise things may spiral out of control. Keep monitoring your spending, your debt situation, and your other financial commitments so that you are always in control of your money. Make adjustments as needed, and there will be adjustments. Life is unpredictable, and although the daily grind is repetitive, things change and so will your budget. Learn to adapt to keep ahead of the curve and on top of your personal finances.
By following these ABCs you can take your first steps towards better and more efficient financial management. Remember that you are the one in control of your finances, and the choices you make will have an equally good or bad effect. So start making the right choices today.