How to get rid of bad financial habits Bashny.Net

A simple way to begin to rationally treat money and stay within budget. It is unlikely that people think growing up: "I think I'll play fast and loose with money and never going to meet the budget." But bad habits, like late payments on credit cards, and bad that their victim easily become and not on purpose.

Do you have bad habits related to money? Or, maybe you are abusing credit cards? If you answered Yes to any of these questions, you may be wondering how these bad habits to get rid of.

Because habits are called that, as a rule, are formed throughout life, and to change their behavior is not so simple. If you owe rent and do not know where to take her money, it's time to do something. We should start with a plan.

The basics of cashflow


In our terminology, the cash budget is such a special type of budget when all costs are paid solely in cash, and the figures are based on spending last month. You can pay the bills online, but all other monthly expenses we pay in cash or debit card linked to a savings account. A budget approach allows to refuse from bad habits and to bring the finances under control.

Then needed the cash budget: to figure out how to extinguish the credit card debt, and how to track expenses and save more money.

The cash budget you organize budgeting should start with the analysis of costs. Data for prediction can be obtained by analyzing the income and expenses for the last three months — this is enough to understand how much and when you'll need money.

Let the sum will be the average over the last three months. Now you need to divide the budget into categories and to sort them money. Usually the categories are: savings, mortgage or rent, utilities, other bills, food, gasoline and entertainment. Of course, you may have a few other categories.

So, you have a budget forecast based on categories. You can create a document or spreadsheet to track monthly expenses. In the first column will be the forecast for the category, the second is cost and third is the discrepancy between the forecast and actual consumption. So we will see where you have overspent or conversely, savings.

Will help to reallocate funds Now, watching incoming and outgoing cash flows, you will easily notice disparities in some categories. The cash budget the current month based on previous expenses. How was the previous month? Comparison of projected budget with actual will help to understand how to redistribute available income.

Assume that entertainment is more important to you than food. Explore opportunities to reduce the cost of food for each month they have some funds left for entertainment. If you pay for the utilities you have to "climb" to the accumulation, you may need to reconsider the priorities for spending next month.

If you are constantly short of money in one category and has to take another, think about what is important to you. This information will help you determine where to cut spending.

Teach rational spending


Happened unexpected expenses? Was it unexpected expenses or just had to cover the deficit of one category at the expense of another? A credit card is banned. You can use it only in case of emergency.

If you keep in mind how much money you can spend in a month in one category or the other, with every purchase you will be thinking about the need for spending. Because to resort to using credit cards is not to spend money will have to be careful.

You will find that constantly asking myself in the store "And if I need it?" The cash budget will teach you to live within your means, because if the money ran out, then they are no more. You will no longer mindlessly to pull them.

Will help to find a way to delay Starting to live with the cash budget, you will know exactly what the money is spent, and whether you have the ability to postpone. Maybe you realize that spending less than you earn, and is simply money in your Bank account. It's pointless.

The money should work. You earned them with their sweat and blood, now let them work for you. All unspent should invest or at least be put on Deposit. The cash budget will help you to make better financial decisions regarding savings and investment.

Prepare for the future You can't be a good financial forecaster, do not learn to plan their own finances. Starting to predict spending based on expenses for the previous month, you are laying the Foundation of their financial success. Knowing how usually you spend, you have to adjust the budget to achieve the goals.

The cash budget will help to maximize the potential of existing money and increase the chances of future financial success.

 

P. S. And remember, only by changing their consumption — together we change the world! ©

 

Source: insider.pro/EN/article/42460/