On many occasions, due to ignorance, we become expense managers. That is, we look at how much money we have to spend and look for ways to do it. The consequence is that at the end of the month the account continues to zero and this behavior becomes automatic and lifelong, for a lifetime.
But it is normal, because it is rare to find financial training in formal education and everything we learn comes from the habits of our environment. Although today I know that there is already financial education in the institutes, although not for all students, but we are on the right track.
I want to give you good news, personal finances are easy. Finance is a branch of mathematics and although many people are afraid of killing them, I assure you that you only need to know how to add and subtract.
Believe me that the most decisive component is the staff. Often it is the habits and emotional intelligence that determine our wealth, rather than the money itself.
And I think that to improve any situation, it all starts with education. In this case with financial education.
So in this post I will tell you how to learn to manage your money in less than an hour a month.
How many times do you check your accounts a month?
Checking your checking accounts to see that nothing strange has happened, that is, that there is no strange charge that you are not aware of, is not analyzing your personal finances. To know how to manage your money it is essential to know your current financial situation.
You have to let the numbers speak and show what the reality is. A reality that our mind distorts, but that does not deceive mathematics.
So step number one to determine how to manage your money well is to analyze your current financial situation.
But do not worry that it is a simple analysis that will not cost you much time to do. Maybe the first time is more laborious because you’ve never done it, but then it’s a follow-up.
Where does your income come from?
If you want to know how to manage your money, you will have to know how you get your money.
To do this you have to be clear how many sources of income you have and how much money you give each one a month. Make a list where you collect each income item.
Normally we only have one main source of income that comes from the payroll. Although you may have other income because you have two jobs, do something in your spare time, or your checking account gives you a small commission per month. Whatever it is, pick it up and write it down, everything adds up and you have to take it into account.
Being clear about your sources of income is important so you can determine how you can increase revenue in each of the sources. Ask yourself the following question, since they can open a new world: How can you increase the income you receive from each source of income?
Write down all the ideas, surely you have some easy and fast to implement and that will generate a positive effect on your economy.
Where do your income go?
Once you have clear your income now it remains to determine how you manage your money. Your expenses are where your income goes, your energy.
Understand that money is physical and mental energy , since you allocate time and other resources to get money. So what do you do with that energy? Where do you decide to spend it?
An analysis of your daily expenses is essential to understand what your financial habits are. We are what we do day after day, our habits, and identifying that will show you what is limiting your growth.
So collect all your expenses and make it clear where each euro you earn goes. To know how to manage money in the future you will have to know how you do it today.
As we have so many expenses, and it can be overwhelming, it picks up the expenses by items, so it will be easier to analyze. By items, I mean don’t look at every product you buy at the supermarket, but add everything and make a meal, for example. Other items are what you use for leisure, your home, your car, your debts.