The way to use money correctly is through managing your spending. This is the first step you need to take to reach a new level of wealth. For people who are starting to comprehend the basics of financial literacy for the first time, this is the most difficult stage. In addition to the fact that it seems complicated and boring, there are dozens of objections: “I am in debt! Not up to plans now “,” I have a big family, what are your plans? It would be enough for life … “. Let’s try to understand why you need to plan your expenses in each specific situation.
“What should I plan? Your three cents salary?”
It is difficult for people with low incomes to tailor their family budget. Planning will help: to improve the skill of managing expenses, to make them conscious; not overpay for the right thing, have time to buy it; see how much money you can (and should!) save.
“I have enough money. I will still count, just tell me where to carry it ?!”
The habit of living apart from money makes a person dependent on their amount. Any crisis can unsettle him. The accounted expenses for such people are: order in cash flows; expanding the horizons of not only purchases, but also the use of good, profitable financial instruments; a clear step-by-step plan and means to return to the previous level of comfort in the event of a crisis.
“I have a steady income”
Stability lulls alertness. If you do not see the situation further than a month ahead, it is difficult to dream of big goals. Planning will provide: a way out of the comfort zone for the implementation of new goals and plans; understanding that there will be enough money for more; new approach: savings, investments.
“Why should I plan? I work for myself: today in the red, tomorrow – profit. If there’s money, I’ll cover everything”
Life on the principle of “now empty, now thick” requires a more attentive attitude to where and on what money is spent. Control of expenses will allow such people: to see how much money is actually there; plan and implement personal and business goals; do not overpay, do not buy unnecessary items, which means that you do not feel disappointed with what you spent at the moment of great profit; be able to save money for different purposes, not mix them up and always have stocks for a rainy day; do not accumulate debts.
“I’m in debt! No plans now”
Debt is a problem that needs to be urgently addressed. In this case, cost planning is a “medicine” available to any person. Benefits of planning: will show the weaknesses of the budget that need to be strengthened; will step by step get out of debt; will help you see the overall financial picture, take measures to make loans and debts a thing of the past.
“I live within my means, I have enough for everything”
For people who have enough for life, who do not want more, or do not think too much about it – a list of questions, the answers to which are hidden in planning: What will happen if tomorrow you lose your main source of income and cannot quickly replenish it? How much money will you spend if something unexpected happens? Do you have funds to educate children? How do you plan to financially meet your advanced age? Would you like to improve your living conditions, travel, change your car, not depend entirely on your salary?
“I am still young, I can live without worries”
In youth, I don’t want to count money at all, although, as life shows, this is the time of the most effective reserves for the future. Even the smallest contribution to savings and investment in youth will bring rich rewards in adulthood. Plan your expenses, because it will: teach you how to save regularly, create capital, increase the stability of your position; will save you from debts and unreasonable spending; will give you a reason to be proud of your decisions in the future; will give you the opportunity to try various tools to increase income.
“I’m already old, I don’t need much”
The older a person is, the more difficult it is for him to build in financial habits, change his lifestyle and learn something new. Even if it’s helpful. But it is in adulthood that planning will: prepare for a decline in retirement income; will allow you to live a full life.
“I have a big family, what are your plans? It would be enough for life!”
The family budget, common or separate, is in itself a reason for planning. The family has more goals, more needs, more obligations. And since the family consists of people of different ages and income levels, then arguments from all the categories listed above apply to the family. Just re-read the article and find something that will convince you personally.
Planning expenses will help you to be more sensible about spending, to see the life situation in advance, and therefore to prepare for most surprises and achieve goals. It motivates you to do more finance and explore ways to increase your income. This is the right path to investment, comfort and independence.