Everyday someone tells me they don’t know how to manage their money and they don’t know how to start managing their money.
The simplest way to think of managing your money is that the “ins” have to equal the “outs”. That is to say that your income, from all sources such as employment, EI, support etc., must equal your spending and the amount you have allocated to savings (you are saving, right?). How you keep track of that is going to depend on your personality. There is no one size fits all.
Certain expenses are fairly easy to keep track up because they always the same. This would include things like rent, mortgage and car payment. Where it gets tricky is managing the expenses that change all of the time such as gasoline or groceries.
For some people, they like to keep a certain amount of cash with them and then write down everything they spend. For other people they place the money in a jar or in a freezer. They put all of their receipts in the jar or freezer and when the cash is gone, they have no more money to spend.
In order to do that, you first need to know how much you have to spend. Look at last month’s bank statement as a guide, but as you can see keeping track of your money to not an easy task.
Doug Hoyes has a secret to budgeting …. don’t. Instead he talks about managing your money through calendar money management. Time your expenses to match your income. Again, this might not be for everyone, but it’s a starting plan.
My suggestion is that you know yourself best. Spend a few minutes researching various ways to keep track of your money. Ask a friend how he or she tracks her money. And most of all, stick with your plan.
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