Money, money, money!! Have you ever felt that one day you had so much of it, and the next day you find yourself wondering where it all went? Perhaps that is a sign that you need to know more about managing your finances and today, you’re in luck because you’ll be learning all about the basics of personal finance in this article. Let’s go straight to the most important thing to remember about personal finance: Increase your income and reduce your spending.
This means that you shouldn’t spend more than what you earn, as this would only lead to debts. If you follow this simple rule then you’ll eventually be able to save money. However, knowing the rule isn’t all there is to it One of the most important things to do to make sure you follow through with this rule is to make a budget. Know how much you earn in a month and list down your spending.
Start with the most important ones first and then move to the least. It’s also good to start the habit of setting apart a percentage of your income for saving.
Then whatever’s left would be the reward that you could give to yourself for knowing about personal finance, along with the feeling of fulfillment that comes with it Let’s go back to the rule and scrutinize it a bit further. The first part involves “increasing one’s income”.
Now, “increasing” it would be ideal it but maintaining won’t be so bad either, especially if you are already content with what you have But for those who want to do so, there are a lot of ways to gain more money. Nowadays, there are a lot of online sites that allow people to gain income, like writing blogs or even creating videos. Another way is to make a hobby into a small business, for example, selling baked goods if you’re into baking. The second part of the rule is to “reduce spending” or take out a loan.
Now, this the part where some people struggle but it all starts with distinguishing your wants from needs. Ask yourself whether what you’re buying is really a necessity or perhaps there’s a cheaper and more guilt-free alternative waiting for you somewhere. And just imagine, that saving even a dollar a day could get you 365 dollars by the end of the year So start spending less, and saving more! And those are the basics of personal finance. Simple, right? Now, all it takes is for you to follow them and then you’ll be on your way to personal financial success.