The personal finance is the skill that allows you to manage your funds actively to analyze so thin on your economic situation, manage it and increase it.
Keeping a personal budget at your own expense gives you the benefit of having a clear idea of your present, past, and future financial situation: if you are reading this article you will probably want to learn how to best manage your assets.
This article is divided into 3 parts: the first is to take awareness of your assets and to become the master of what you own, in the second we will see strategies to increase your wealth, while in the third phase we will see which are the best tools to manage your own personal finance.
Step # 1 – Capital Analysis
You can not effectively analyze your pockets without having a clear picture of your economic situation, so the first step is to check what and how much you have with the aim to better manage your own money.
Start by counting your properties to figure out how much your capital amounts to a list of your wealth status by adding all your assets.
You might argue that you do not have all these things to list, but I invite you to think about it carefully, there may be things you do not think anymore, here’s a small list that can work as a base from which to start:
- Current bank account
- Postal account
- Actions and titles
- Prepaid Cards
- Money scattered around the house
- Money Box
- Any valuable items you would like to sell
- PayPal account
- Other money
Now you should have clear on the cards the amount of your savings and the state of your personal finances, a condition necessary to properly manage your money; to better orient yourself, you can calculate your CashFlow, that is, your net income, that is, the difference between your earnings and your outflows.
Now that you’ve calculated your average monthly CashFlow, point it to a paper block because it will help you in the next steps to manage your personal finance.
Step # 2 – Increase your revenue
I’ve talked about how to increase your wealth in the money- guided guide, in which I explain the different types of income and how to generate them, the 4 basic strategies to earn, which to sum up are …
- Diversify your revenue: Having at least two cash inflows is a benefit not only for the amount of money generated but for having a financial lifeblood that can withstand a possible lack of money from primary income.
- Build a system: Building a money factory mechanism is the best way to generate a secondary income, perhaps passive.
- Investing in knowledge: An effective way to make money is to invest in your own passions, generating an income from your own hobby is definitely better than investing your time doing a job that you do not like or for which you have no interest.
- Save: This point does not require any further explanation if you want to read more about saving articles or the SMarT method.
These are the 4 main legs to increase your wealth, to which I add some generic advice to manage your personal finance:
- Put your savings into an account without a cash machine, so in order to withdraw it you will have to do the queue and you will be discouraged to do so
- Create a job that generates passive income
- Save at least 10% of your income monthly
- Get the habit of saving, little but often
- It cures your financial education
- Spend less and less of your income
- Use cash and limit the use of cards
If you want to open a new bank account, insurance, mortgage, loan or telephone plan, the Facile.it site can be useful : from this portal you can quickly compare all the available rates on the market to choose the most advantageous proposition.
Step # 3 – Manage Your Personal Finance
Properly managing your own personal finance can be a panacea for your pockets, having your incoming and outgoing entries automatically in a convenient chart or a clear list of expenses is a valuable help.
Let’s go now to some tips to manage your home finance:
- Focused on your financial growth: Let the global economy stand out and get away from the financial news broadcasting on television, by the way, did you start your media diet ? Do not waste your concentration focusing on external factors that you can not change, shift your attention to your personal finance that depends on your choices, but leave the global one on which you obviously can not control.
- Check your CashFlow: With the simple formula in the first paragraph, you can calculate your monthly net revenue, whatever you decide to do, try not to exceed this figure, your CashFlow is the starting point for investing, saving or spending, in this regard read the article dedicated to the habits of wealthy people.
- Only good debts: Good debts give rise to an annuity, they are an investment for the future, these must be most of the debts you will pay, a car or a branded outfit are bad debts, they do not make and don’t make money: pay close attention to this fundamental distinction to properly manage your personal finance.
- Use paper as a strategy: If you can not do without a credit card, decide in advance what amount you intend to spend each month and deposit these money in your credit card. Your mainstream account must have as a single movement the transfer of the selected amount to the credit card. Then during this month you only use this money, forget about the mainstream account and treat the money on your card as the only source of money available. Having a fixed and unalterable amount of cash on a table every month makes it easier to manage your expenses.
- All in one place: Buy a piggy bank and deposit all the coins you find at home, any coin or flying banknote should be included in this deposit. Take the habit of inserting something everyday, little but often.
Learning to keep accounts and manage your personal finances is a useful skill that accompanies you all my life, and I did not coincide with the most important personal skills.
If you have never run your personal finance, it may be tedious at first, but after a couple of months with the first budget under your eyes, you will soon have the satisfaction of having your home economy under control.