Robert Trosten says people often worry about handling a lot of cash and cannot decide how to manage it. The school does not teach you how to manage personal accounts. It is a talent that everyone must know. But the fact is managing personal finance does not require any skill or degree. You only need some awareness and a plan for your expenditure.
Here are a few steps that will help you to challenge yourself in terms of solving your money problems
Rely on cash for your expenses, says Robert Trosten
Using ATM cards can make a person spendthrift and develop poor habits. Try to switch to liquid cash for your payments so that you spend only the amount you have. Debit and credit card payments do not move you to think about whether you can afford an item. Hence, the first step to manage your accounts is to keep all your cards away for some time and use only cash for payments.
Be aware of your expenses
Make sure to think before you make a purchase. Ask yourself whether you need to purchase that item. Do not reach out to your credit card if you are falling short of cash. You can always come back later, thus allowing yourself time to rethink your purchase. If you want to save money in the long run, it is not sensible to use more money than you possess.
Track your expenses
Many times, people have a lot of money at the beginning of the month, but everything seems to have vanished by the last week. Unless you track your daily expenses, you will not be aware of your monthly expenditure. Try to write every penny you spend in a small notebook or use an application for the same. Monitoring your payments can help you minimize extra outflows, thereby helping you save at the end of the month.
Substitute an expensive habit with an economic one
Cutting down a few costs can sometimes be fruitful for long term savings. Try to replace your splurging with an affordable one. For instance, if you munch on an expensive snack every day after office, you can substitute the same with a glass of fresh juice, thus motivating yourself to eat healthily. Similarly, taking a break from other unhealthy habits such as smoking or drinking will also save you a lot of money. The extra money in your account will motivate you to continue these habits at the end of the month. Challenging yourself to bring a change, says Robert Trosten
Plan your income and expenditure
Sit down with a notebook every month and create a blueprint for your upcoming inflows and outflows. Look for ways you can increase your savings. Keep aside money that you will be spending for the month. Prior planning will not permit you to spend more than you a lot on the monthly expense. Create a budget for yourself.
Determine ways to minimize expenses
When you are at home, you can start small. Begin by turning off the appliances when not in use. Avoid ordering food every time you wish. Try taking the initiative to cook a meal when the house help is not available. Consider looking out for products you do not need and are adding to your expenditure. You will acknowledge your achievement when your monthly bills begin to get smaller.