It is a well-known fact that money plays a very important role in our life. Its importance is explained by the opportunities and benefits that money provides to us. A modern apartment, vacation in the best hotels, an expensive car – all these things are examples of advantages, which are provided by a particular amount of money. That is why we pay close attention to its quantity trying to increase it as much as possible.
However, the gift of mastering the money is not granted for everyone. By mastering, I imply the ability to manage funds effectively so that you will be able to save money without a drop in quantity or quality of particular services. So, how to become a wizard and get in line with your financial status?
Write Paper to Find Ways of Watching Your Money
Obviously, if you want to be aware of your financial position you need to keep records of your expenditures. However, it is not the full plan of actions. Apart from keeping the records, you need to make notices about your income as well. The best way to combine both functions is to come up with an accounting paper that will reveal all your financing activity.
Firstly, it may seem to be as easy as a pie. But you need to comprehend the art of creating effective accounting paper that will include all details and factors. And these details and factors have to be mentioned appropriately: logically and reasonably. Do not focus on one particular side of your financial status: if you have additional income, do not forget to mention it as well as additional expenditures that have not been written in your plan.
By the way, the creation of a financial plan will help to facilitate control over expenses. You can compose it using various applications; the easiest way is to use Excel.
Having written down your financial flows, you can understand what can be optimized to increase the amount of savings. For example, if you see that you spend too much money on coffee, you should limit the frequency of visits to such cafes.
And do not hesitate to ask professionals for help: there are a lot of writing services that could help you to proceed with writing an accounting paper. Do not set limits, and you will see an abundance of opportunities.
Estimate Opportunities
Before saving money or taking a loan, it makes sense to analyze incomes and expenses and determine how much you can save and what monthly payment you will allocate.
You need to remember your main expenses for the past three months, eliminating the optional expenses, and structuring them into groups. Then compare the mandatory costs with the income: the rest of that amount will be devoted to savings.
Make a Deposit
At the initial stage, the most appropriate instrument of saving money is a deposit of up to 10 000 dollars with a fixed interest rate. When choosing a deposit, pay attention to profitability, reliability, and flexibility.
With profitability, everything is clear: the higher it is, the better your income will be. Reliability is ensured by compulsory insurance of deposits. As for flexibility, the most interesting is the possibility of monthly replenishment of the deposit. It is also worth choosing a deposit without the possibility of early withdrawal: this will help to avoid the temptations to spend the money.
Do Not Risk Money
Do not play the stock market if you have just started to form a financial reserve. Although by means of exchange instruments there is a chance to receive the planned amount much earlier, still there is a high risk to lose everything. Especially, if you are not a professional financier and are not aware of financial pitfalls.
Investing in financial markets, a person should understand that he is freezing money for three or five years. Do not play the stock market until you have satisfied your basic needs. If you are already pleased with life conditions, you have two options. If the income is relatively small, it is reasonable to invest a small amount in the stock market each month. If there are more than one million dollars on your account, 30% of the capital can be invested in liquid securities, and the rest – in bonds and deposits.
Be Careful with Loans
There is one golden economic rule: the less you take on a loan, the better your financial status is. Sometimes it is extremely difficult to withstand the temptation to buy a new thing right now. In this case, you have to take into consideration the percentage which you will overpay to a bank. After calculating this amount, you will be able to comprehend what exactly you could buy. A car instead of a computer? Or an apartment instead of a car? So, is it beneficial to buy a new thing right now?
I know that it is very hard to withstand the temptation especially if the sign “without %” is written on a desirable thing. However, there is no such thing as a free lunch. In this regard, you need to possess the gift of being patient and get everything in its time. If you do not know what patience means, go here. These guides will be very useful for your successful future.