It is usually a headache. Taking a look at bank account numbers, savings, debt … is not something that most people enjoy.
You’ve probably already read or heard that you just need a little organization to put everything on the axles. The problem is that organizing finances is not always easy, even more so when we have habits that make us spend more and more.
This year has been a turbulent year. 2020 is the year of economic crisis, also known as the quarantine recession, which negatively affected the 7 to10 millennium generation. Therefore, it has become more important than ever to think about your own financial situation. So where to start? Don’t worry; we’ll share a few basic tips with you.
So how do you manage your money in the best modern way?
To better manage your money, you must first rid yourself of “toxic” behaviors.
Therefore, we separate some lessons that can be quite useful. Here are some Modern basic rules that can help you!
There is a point of view held by many financially successful people, which is this: “reward yourself earliest.”
Setting yourself a personal financial goal is more important than ever these days to secure your financial future. When you take the time and keep track of your financial situation, you will see what you spend money on.
Unfortunately, the millennium generation is often known as the “Lost Generation “for long-term financial goals for their entire lives.
However, you can change that as a professional when it comes to setting clear financial goals for yourself. You just need to know where you want to be, where you want to go, and what you want to use your money for in the future.
Having a specific goal is an incentive to think smarter about every spending decision, thus saving you money in the long run.
Automate your finances
Experts agree that automating finances could be a good way to start.
They insist that it has a psychological effect since when payments and transfers are set automatically, your planning works much better.
In fact, if you set out to save a monthly amount and do not leave it automated in your account, it is very likely that you will forget it or that you will leave it for later since it is likely that you will find more urgent needs.
Almost everyone realizes that for maintaining the best physical health regular diet and exercise are important, and everybody also is aware that for improving individual finances it’s important to spend a short amount and save more,saysDavid Day, a specialist in wealth management.
Never spend more than you earn
“The best investment counsel that I can give is to spend less than you earn,” Kevin Hegarty says, who has the founder of the New York-based company and has long experience advising companies and government agencies.
This is obvious advice, right? Well not so much. Most people know they shouldn’t spend more than they earn, yet they keep making the same mistake over and over again.
Going into debt with a credit card month after month, only makes you put the problems aside. You may not be in dire financial straits yet, but such behavior simply takes away your freedom of choice, as you will be struggling every end of the month.
Understand your current financial situation and COVID-19 crisis
Before you can begin to better manage your money, you must know how much you have in this COVID-19 crisis. You cannot move forward without knowing where you are in this situation. Experts recommend that people start with a comprehensive financial plan in this covid situation that can inventory their flow, income, savings, investments, and more.
All international institutions, especially the IMF, tried to calculate the damage caused by the COVID-19 crisis on the economy for the first quarter, but only based on the decline in the production of goods and services, using different measures.
The deterioration of the balance of the supply side, especially China, and then the demand side caused global chaos. Growth prospects have disappeared completely in the EU, which has almost completely exhausted monetary policy tools. The whole world economy suffered massively in 2020.
In this COVID-19 crisis, you don’t need to hire anyone, you just need to sit down and record all your regular monthly income and expenses. You are surprised when you put the pen on the paper.
If necessary, keep receipts for a month to determine where the money is spent beyond major bills, such as rent, utilities, and debt payments.
For some people, it can be a wake-up call to realize how much is being spent on items like groceries or going out to dinner.
Set personal priorities and financial goals
Once you’ve laid out your current financial situation, it’s time to determine if it aligns with your values. For example, if spending weekends with your family is a priority, paying for a cleaning service can free up valuable time and be a smart use of money. However, it may not make as much sense if traveling is a higher priority. In that case, it is better to spend the money on cleaning on vacation. Defining what you would like to achieve with your money can make the process easier for you.
When it comes to deciding what to do with money, it is important to follow the Rules for Managing Money and allocate a percentage of savings to face the surprises that life gives.
However, it is in your hands to prevent them from continuing to consume your energy and pocket.