We are part of a very fast changing world and this is making it very difficult to keep a record of all our expenses. Most of the people have no clue how to save money with the ever increasing expenses and the remaining do not know what to do with the money they save. Everything you do is going to cost you in some way.
The situation demands from you to know exactly where you stand financially. This way, in case there is an emergency and you require cash, at least you would know where you can generate it from. To start off, you need to realize that you are worth nothing and everything you own is your asset.
To understand where you stand financially, you need to find out the total worth of your assets and subtract all the expenses from it. All assets including your house, car, monthly income, trust funds and everything that can be sold for money is your asset.
Once you have calculated the amount of assets that you have, you now have to find out your total expenses. From the small payment that you make to buy your daily newspaper to the huge amount you spend to renovate your house, that is, everything that comes out of your pocket, will be your expense.
A good financial situation is where the assets exceed the expenses, but if that is not the case, and the expenses come out to be way more than the calculated assets, the mostly likely justification is that a lot of things were not counted as assets. This can be because most of the things you own have been with you for a while, and therefore, you have never considered them to have any financial value. The fact is that everything is worth something, even the gifts that you get from your family and friends.
If you are doing it for the first time, it will be a laborious task to track down your expenses. This is the reason why you should keep updating your financial books, and make sure they are accurate. However, this will give you a fair idea where your expenses are coming from and how your income is being utilized.
Majority of the people end up spending more as compared to what they earn. Reasons for this behavior might be different, but the standard way to make it work is through a loan. Nothing hurts your financial situation more than a loan, because now you are ready to spend the money that belongs to someone else, money that your income cannot cover. You can obviously not save anything if you have taken a loan. So. to get out of this situation, you need to cut down on your regular expenses, and pay back the loan through the money you save. Once you start the cut backs, you will normally end up going to the extreme, and after getting annoyed by the whole situation, give up the idea completely. The only way to make it work is through budgets. Budgeting means that you are setting daily, monthly or yearly quotas for yourself, most practical would be a monthly budget that you strictly follow. This way you can prioritize your expenses and discard the unnecessary ones. The money you save can be invested. Doing all this will help you take control of your financial situation in a better way. - 29969
The situation demands from you to know exactly where you stand financially. This way, in case there is an emergency and you require cash, at least you would know where you can generate it from. To start off, you need to realize that you are worth nothing and everything you own is your asset.
To understand where you stand financially, you need to find out the total worth of your assets and subtract all the expenses from it. All assets including your house, car, monthly income, trust funds and everything that can be sold for money is your asset.
Once you have calculated the amount of assets that you have, you now have to find out your total expenses. From the small payment that you make to buy your daily newspaper to the huge amount you spend to renovate your house, that is, everything that comes out of your pocket, will be your expense.
A good financial situation is where the assets exceed the expenses, but if that is not the case, and the expenses come out to be way more than the calculated assets, the mostly likely justification is that a lot of things were not counted as assets. This can be because most of the things you own have been with you for a while, and therefore, you have never considered them to have any financial value. The fact is that everything is worth something, even the gifts that you get from your family and friends.
If you are doing it for the first time, it will be a laborious task to track down your expenses. This is the reason why you should keep updating your financial books, and make sure they are accurate. However, this will give you a fair idea where your expenses are coming from and how your income is being utilized.
Majority of the people end up spending more as compared to what they earn. Reasons for this behavior might be different, but the standard way to make it work is through a loan. Nothing hurts your financial situation more than a loan, because now you are ready to spend the money that belongs to someone else, money that your income cannot cover. You can obviously not save anything if you have taken a loan. So. to get out of this situation, you need to cut down on your regular expenses, and pay back the loan through the money you save. Once you start the cut backs, you will normally end up going to the extreme, and after getting annoyed by the whole situation, give up the idea completely. The only way to make it work is through budgets. Budgeting means that you are setting daily, monthly or yearly quotas for yourself, most practical would be a monthly budget that you strictly follow. This way you can prioritize your expenses and discard the unnecessary ones. The money you save can be invested. Doing all this will help you take control of your financial situation in a better way. - 29969
About the Author:
Edwood Woodward is a financial consultant. You may contact with him to get debt consolidation services and get his opinions to make financial decisions of your life at http://www.moneysolve.co.uk.
