Learn How To Manage Your Money.  It’s all about Cashflow.

Money is a very is an important commodity in life, and therefore, a commodity necessary to acquire. So, how you will spend, manage, and invest your money will have a big impact on your life. Learning how to save this money can take a while yet there are also a few schools that will teach you these important skills. But learning the basics are simple and never change. For any starter in life, you were taught some basic math but unfortunately, too many grow to adulthood without learning money management skills. These skills include how to create a budget, knowing how credit cards work and how to invest even for the future. If you are aspiring to know how to use your finances and budget them well, the following work will provide you with the resources that you need and much more.

Rules of personal finance

Managing your finances is all about paperwork and numbers. First of all, you should know that if you make X amount of money, then you will have to spend Y amount. That is not all because you have to make sure that the amount you spend in Y is less than the amount you spend in X. It means that your finance is all about psychology, values, and the habits you choose to live by. In another perspective, you will have to understand that your mindset matters as much as your math does. On top of all these budgets, there are a few things that you should know.

- Always spend less money than you earn: if your total earnings in a year are $50,000, and you spend $53,000 in the same year, you will end up in a spiral of debt that will be difficult for you to escape from. At the same time, if you spend as much as you earn, then it means you will never be prepared for emergencies. For a good financial planner, less than what you earn because it will give you a freedom to save, prepare for the future and handle the unavoidable problems that life brings to you. Always aim at having a bigger gap between your spending and your income.

- Plan for your future: when you plan for your future, it does not mean retirement. If you find a store that will give you a gadget and let you pay off in six months without interest, calculate first and know if you will be able to pay it off and if not, avoid taking the deal. If you plan for the future, it entails that you have income when you are unable to work anymore.

- Make your money make more money: Rich people continue growing rich because their money grows while you sleep. They work on an ideology of belief that if money is invested well, it will make more money over time. Avoid stocking your money in low-interest savings accounts but in things that will add you more money than what you had before.

Have a bank account

It’s neither wise nor advisable to keep all of your money under your mattress. What you need is an account to keep your money and short-term savings. Your money should be in a bank always such that you can either access them with an ATM or debit card. The bank you preferred should have all the services you require with the fewest fees.

Also, keep in mind that not every bank has a physical address. Some are online only and come with certain tradeoffs, but they also offer fewer fees and better services. Their interest rates are also better compared to others. This means that the money you will save earns a little more just to keep it in your account. Sometimes, you will find yourself in a crossroad of not knowing which bank to go with. Don’t worry because most banks offer similar services and if you don’t like the services of one, you can always change to another.

Set up a budget

A budget will let you know where your money goes and therefore, spend less than you earn. This will give you a clue of how you are managing your money. When you are young, you do not have a lot of money since your career is still new. You need to prevent financial problems by categorizing your bills and keeping a track of your expenses. The amount you use in a month should be less than the amount you earn monthly. If you realize that you are spending more than the amount you earn, then you should check the expenses in your list and see which one should be cut down. Try to use Seth’s ideas on how you should divide your money, i.e.

- Your fixed costs should be between 50-60%. They include rent, gas, groceries, power, your cell phone bill and anything else that stays the same. Some may vary a bit but can be predictable.

- Investments should have a 10% take.

- Savings should scroll down to take a 5-10% of the money. These include savings on vacations, gifts, purchase and others. This category should also include a fund for emergency spending.

- Your guilt-free spending should take 20-35%. This is where you save whatever you want. It includes dining out, drinking, entertainment and others. They are always seen as a financial vice, but the truth is that we always do these things because we enjoy them.

Use your credit cards wisely

You can easily get your credit cards easily but at the same time you might be overwhelmed and end up owing up too much money. If you put yourself in such a hole, then you have only dug yourself a hole that will be hard to climb out of. If you want to maintain yourself well, don’t use credit cards to buy things that you can’t afford. Only use what your card has and pay off any balance at the end of the month.

Remember to save for the future. You start off by remembering those things that you saved as investments and savings. Make sure that you have separate accounts that you don’t have any credit card to access it. This will always wait for that time when you don’t work anymore. You will then have succeeded in life.