How to Take The Stress Out of Managing Your Personal Finances

For most people, money is the fundamental requirement in life, and all the other aspects of your existence revolve around your ability to earn a living and manage your income. It’s well-known that money worries are a significant cause of mental health problems and relationship breakdowns, yet when it comes to managing your money you’re mainly on your own.

Financial planning and budgeting are starting to be taught in some schools, but many young people enter adulthood with few skills in money management, and understandably find themselves in financial difficulty. It doesn’t help that there is so much expectation placed on people by society, and the ubiquitous presence of marketing messages that tell you life isn’t complete without a particular product.

If you’re having trouble managing your income and outgoings, don’t ignore the problem and hope it will go away. You need to take control of the situation and get back to the basics of sound money management.

Balancing income and outgoings
If you haven’t already done so, take some time to work out a list of your monthly income and outgoings and put them into a budget spreadsheet so you can see where your money is going. Work out your figures as accurately as you can by looking at your previous expenditure, because guessing at how much you spend on groceries each week doesn’t give you the facts you need to make your budget balance.

Complete a year’s worth of entries, so none of your expenses gets missed out, and compare your income each month to how much you’re spending. If you’re spending more than you’re earning, you have two choices; cut back on your expenses, or increase your earnings.

Cutting back
Examine your figures in detail and see if you can see where to make some economies. The great benefit of having a spreadsheet prepared is that you can see what you’re actually spending on everything, and some of the sums may surprise you. A simple example might be that although you’re only paying a few bucks a day buying sandwiches for your lunch, over the month, it mounts up to a sizeable hundred dollars or more. If you made your own lunch, you’d save around three-quarters of that sum, and instantly have $75 in your account.

Some changes are harder to make, for example, if your smoking habit is costing you $50 a week, it’s not as simple as deciding to quit and never buying cigarettes again. Similarly, if you’ve developed any kind of dependency that you have to support, whether it’s narcotics, prescription meds, alcohol, or some other substance, you’ll need help from professionals like Inspire Malibu to help you quit your habit and stop wasting your money.

The other way to balance your budget is to earn more, but your ability to do so depends on your skills and circumstances, and it’s not practical to run your life in hopes that a better-paid job is just around the corner. The golden rule of money management is to spend within your means, so start crunching the numbers and get your finances back on track.
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