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How to manage your money effectively

Have you ever had a feeling that you save money during the week but in the end of the month when looking at your bank account the money you saved isn't there? It is one of the signs that you don’t manage your money properly. Here are 5 tips for better money management within your household.

 

Household finances can be very complicated. There can be a lot of expenses compare to lower income. For the right money management, you must count household as small business. What are the next steps?

 

Check your Expenses and Incomes

You can make a simple verification in order to see discrepancies between your income and expenses. Expenses can be divided in 2 categories: fixed expenses (mortgage, car, etc.) and variable expenses (entertainment, food, etc.). You can even add unexpected expenses such as technician, auto garage and etc. Once you calculate all expenses versus your income that will be a starting point.

 

Set Priorities

Sometimes we want some things right now. However, not every one of us is Donald Trump. Therefore, you have to give up on some desirable things. What is your priority: vacation or home improvement; buying new clothes for yourself or a gift for your child; everything depends what is important in your mind. Our advice is to make a list.

 

Expect the Unexpected

Unexpected expenses are part of our daily routine. A flat tire, a blockage in the pipeline or health care expense - all of these things can happen in our life. Hence, set aside 10% of your salary for unexpected expenses.

 

Change your Habits

You can save money on a daily basis if you just pay attention to it. Use public transportation instead of a car; spend less on expensive restaurants, clothes and different technological gadgets. You will be surprised by the amount of money you can save on things that they could manage without.

 

You can say “NO” to your child

Every parent would like the best for its child. It is hard to say no to your child especially if the parent didn’t have much during his or her childhood. However, sometimes saying “NO” can save you few unnecessary expenses. It is important to teach your child the value of money.

 

Important to remember: the change begins from small things. Proper management of your household finances can be a big difference between saving and having a debt. Changing your spending habits, setting priorities and keeping an eye on your expenses will improve your account balance and will give you a peace of mind, at least financially.