When it comes to how we prepare our kids for the future challenges, we can see that we give them all sorts of training except may be handling the finance. That is exactly why many end up in debt and struggle to build wealth. Well, kids need to be taught as how to budget their money. They need to acquire this skill so early on so that they will not make many mistakes with their money. Budgeting the money and keeping track of the money are really important when it comes to securing your future. It is important to budget your money to preserve your financial health. Let’s learn more.
Money is powerful
As we all know, money can be a very powerful tool in your life. The success of your life depends on how you use that tool effectively to your advantage.
- People are good at earning money. But when it comes to keeping that money most of us struggle.
- Many of us assume that writing down the expenses is the right way to keep track of the money. This is a wrong notion.
- Even if you write down the expenses, you often tend to not look at it again.
Learn to budget money
Yes, learning to budget your money is a very important aspect of your maintaining your financial health. Writing down your income and expenses is a good practice as it helps you see where the money you earn disappears. And some of those findings might be surprising for you as well. You will realize that the small expenses are what the troublemaker on the expenditure column. You realize that the small expenditures add up. You realize that you could have done something with that amount.
Significance of writing down expenses
Yes, it is extremely important to write down all your expenses. This is the first step when it comes to learning to budget your money. You need to write down all your monthly expenses on a paper. If you are good at computers, you can record it on an excel sheet. By doing so, you will get an idea about the common expenses. Now it’s time to figure out all your monthly expenses. This includes everything, be it rent, credit card payment, car payments, utility payments, mortgage etc. You have to consider even the smallest of expenditures. And keep them in specific categories as it will be useful for later easy access. Now subtract your expenses from your income. How much money is left? Speaking of money, Check Out the origin of China’s Currency Devaluation.
Your first budget is ready
You have just made your first budget. You have just learned where your money has been going every month. Now that you where you spend money every month, you will be able to exert better control on the flow of money. You will be able to take back control of your finance this way. You will be able to turn your back on the expenses that are unnecessary. Also, you will be able to set your goals, both short term as well as long term. This will be very helpful in controlling your expenses.