Managing Your Income

The biggest problem that any working adult faces is money management. How often he we heard or even heard ourselves say “my money goes out as fast as it comes in”? This is a hallmark of poor money management.

The basic idea of managing your money is to spend less than what you earn. When you write it down like that it seems very simple, but obviously it is more complicated than that. The first step in managing your money is drawing up your budget.

Open a spreadsheet (or use a piece of paper if you like) and start putting down your fixed expenses down one column. These can include rent, loan payments etc. Anything you know is a definite cost that you have to pay regardless of whether it is used or not. Then on another column put down your income. This could include your salary, any extra jobs, interest from fixed deposits etc. Now compare the two; hopefully there should be a positive difference where you are making a fair amount more than you need to pay off.

Now this difference is what you have to play with. This is the amount you have to pay for your food, entertainment, shopping etc. So now you can plan out exactly how much you can spend. When you are doing this, don’t forget to set aside some money as savings. When you are in tight spot, savings are what will help you out of it. Do a budget ever month and keep track of your expenses, this is the tried and tested method that has help generations in managing their money.