19/07/2022
What is personal finance?
This is money management, in which a person adheres to the principles of financial literacy: sets goals, draws up a budget, taking into account income and expenses, plans purchases, forms savings and invests money to protect them from inflation with the help of bank deposits and investment instruments, for example, stocks or bonds. To learn how to manage your personal finances properly, follow simple rules.
Revenue analysis for the year.
The first step is to assess how your budget has changed over the past year. Analyze income and expenses, calculate financial obligations, loans or debts and how much money you have now.
Start with a monthly income and evaluate its stability. Does it depend on the season, good circumstances and other factors. Do one–time events affect him - bonuses, part-time jobs, sale of property. Collect as much data as possible so that you can objectively assess the level of earnings.
Bank statements on your accounts will help in the assessment, where you can analyze how income changed every month and what influenced them.
Analysis of expenses for the year.
Then proceed to the analysis of expenses. In many banking applications, they are automatically sorted by main categories. Therefore, you can immediately see how much is spent on housing, food, loan repayment, entertainment, etc. However, if you often pay in cash, then you need to make your own expenses in a regular excel spreadsheet or use special applications for personal finance.
Try to take everything into account. The results of such an analysis may be unexpected. You will be surprised by the amounts you spend on some things. So, regular taxi rides or stable online shopping for a year can make up a solid figure. An unpleasant surprise can be large impulsive purchases, for example, gadgets or sports equipment, which you quickly stopped using.
