Personally, I can only recommend everyone to have a detailed overview of their finances at least once a month. Many print out a bank statement once a month, meaning they have a complete overview, but this shows only a small fraction of the current personal financial situation. Although I see all income and expenditure, but where I stand exactly, but not immediately obvious. For example, if I finance a car, I can see the monthly installment on my bank statement, and in the first few months, I might also know how much money I’ve already paid, but eventually you do not think about it any more, just know that the car is paid off in 5 to 80 years.
How can I get a financial overview?
This is very easy. All you need is a writing pad, a pen and a pocket calculator and a little more time for the very first financial overview . First, you create a table with two columns. In the left column you show all the income and in the right column all expenses. You really should be very specific, because you want to be able to take a real inventory of your finances. When all the receipts and expenses have been listed, you add both items, then you subtract all expenses from the receipts. In the best case, the result should be in the green, a minus would not be so great. If I spend more money than I take, there is of course a need for action here, more on that later.
The financial overview as motivation
You have heard rightly, the financial overview can serve as motivation. How to motivate? This is easier than expected. As mentioned at the beginning, many people know how long they have to pay off their new car, the new TV, the new kitchen, and so on, but the actual overview is often lost because you do not think about it every day. However, the financial overview will make you aware of this as this issue is updated every month. For this you make behind all funded issues a large R (stands for installment) and behind it comes the total that you still have to pay off. As you update your financial overview every month from now on, this amount will decrease from month to month. And this update can be your motivation.
Improve your own financial situation
As mentioned above, the revenue should always be higher than the expenditure. If these are very close together or outweigh the expenses, there is a need for action, at least you should change something and improve your financial situation. While there is little change on the revenue side at first, the spending side offers a lot of potential. The financial overview has listed all spending points, now look at them more closely, look at the highest amount points first. These are usually the costs of purchasing, the car and energy costs. At this point I refer to a few useful saving tips.
- Save money while shopping
- Save money while driving
- Save money in the household
This procedure may take a while, the savings tips have been successfully implemented, should in the next financial overview in the following month, the expenditure significantly improve or decrease. Furthermore, you can ask by the listing so many issues even quiet once. Here are some examples and suggestions.
- Monthly Fees for the Gym – I go to the gym two to three times a month, is it really worth the fee? 29.99 (or higher)? Nature also offers many opportunities to keep your body fit.
- Cost of Cigarettes – Do I really need to smoke a box a day or is it not enough? By halving alone saves between 60 to 80 euros a month.
- Saving money during the lunch break – Do I constantly have to get something for 5 euros a day from the takeaway? Self-cooking is cheaper and healthier in the long run.
Building a financial cushion is possible
Since his finances are now always up to date, there is the possibility – to build up a financial cushion. For example, if I am on my income side with 500 euros in the plus, so I can think about whether I could do without 100 euros and deposit them monthly in a financial investment. Alone the pure savings amount is after one year already at 1200 euros, after 5 years it would already be 6,000 euros and after 10 years, it would be even 12,000 euros. If I had not created a financial overview, I would somehow know that at the end of the month there is still money left, provided that the income is above the expenditure, but the likelihood that the money will be spent in the following month, can be very high, because the money is incidentally spent with.
A detailed financial overview makes it a first-time job creation. Such an overview gives a lot of information about which situation you are in right now. Many of you will be surprised at how good or bad you are financially.