How to restore balance to your financial life in 3 steps
Financial challenges have become one of the main causes of anxiety, distress and anxiety among people today. For many, months and years pass, and they are surprised that they revolve in a vicious circle between earning and spending! Maybe they think that income is not enough and that the increase in income is the solution to regain control of their finances? But reality proves the opposite. Most people with high incomes also revolve around this vicious circle and end up penniless at the end of each month!!
The vast majority wish that they could save money, but I can't, because the needs and requirements of life are more than income, as they think. And they do not realize the truth that has been proven by economic and social studies that the real cause of financial trouble for most people is not the lack of sufficient money, but rather the lack of sufficient knowledge of how to manage what they get from the money.
You may also suffer from the same problem and run in a vicious circle between earning and spending! The first step towards rebalancing your financial life is to get out of this cycle. To achieve this, we offer you 3 scientific and practical steps that we will reinforce with examples and numbers so that they are easier to understand and assimilate:
1. Recording and tracking expenses
Every person, regardless of his income, must know his income and the size of his expenses, not for the purpose of saving only, but to organize his financial life. You will know where your money is going without even realizing it.
We give an example with numbers so that the picture becomes clear: Let's say that an employee (a family of 4 people) receives $2000 per month, and when recording his expenses he found it as follows:
$500 His expenses in the supermarket (food)
were 300 The total of his expenses in other markets was
600 The rent of the house with electricity was
200 rent The nanny
150 phone bill
$90 fuel for the car
700 credit card expenses (including car repair + clothes purchases + restaurants)
He discovered that his monthly expenditure amounted to 2540 dollars, meaning that he spent more than his income, and it became necessary for him to balance his income and his expenses, and this would not have been possible without his attempt to track his expenses and record them in precise detail, and this monthly disclosure is the first step towards balance, because this employee discovered that he He reaches for his income in the coming months, and this is a risk to his financial security. Where he was using the credit card to cover the rest of his expenses, and it became clear to him that he had misused it, and that he had made a mistake in visiting restaurants during a period in which he needed to save.
2. Expense and expense analysis
This step will make it possible to identify the kinks and determine the excess or wrong expenses, which are a small hole through which money leaks, and do not forget that a small leak can sink a large ship.
We return to our example, after the employee recorded and tracked his expenses, and after analyzing them, he found that there are two non-reducible obligations, namely the rent of the house and the nanny's fee, so he began to look at other expenses in order to follow up on the leakage in them, and from here he began to work on the treatment of these leaks, and he found that the phone Gasoline and the expenses of restaurants and supermarkets need to be monitored and saved, and it will work to reduce their monthly amount, not a miserliness but a measure.
3. Planning and rebalancing
The secret to personal financial success is that your expenses are always less than your income. A monthly budget is the best way to achieve this faster. Adjusting your spending through advance planning enables you to fill in the gaps in which the money goes on temporary pleasure matters and divert that money towards more valuable things, such as creating an emergency fund because sudden expenses can be a fatal blow to you in the absence of spare money, or the surplus money can be directed to investment Invest and improve your financial situation, get rid of your debts forever, or inject them into private capital to start a life-changing business idea.
Finally, living a successful financial life is not easy and is not difficult either, and make sure that personal financial planning skills are among the most important principles for living a successful financial life, starting with learning to rationalize consumption, setting a budget, increasing income, saving and investing.
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