A Simple Quiz to Understand If You are Any Good with Managing Your Finance
Managing money is not easy, especially when it is about your own finances. Here, you not only need to have some knowledge about money management but also need to have some stamina and discipline to avoid wrong decisions. There is no set guide that will perfectly teach and help you how to manage your own finances. You need to create your own guide.
Yes, it is a long process and requires high self-discipline but for the aim, it is worth trying. Today we will try to give you general tips which can be suitable for any individual occasion and help you manage your own finances easily and more effectively. Also, we will give you simple quiz questions which will help you to find out how good you are at money management today.
How to Manage Your Own Finances - Primary Aspects to Know
It is not right to think that managing your own personal money will be hard because of a lack of financial knowledge. Everyone can do it but if you have some financial knowledge, it will be much easier to start and maintain the improvement. There is no specific knowledge required but understanding the importance of financial knowledge and some definitions will enrich your skills strongly.
The most important part is to have a specific budget for the period. This is a must to monitor your income as well as spending. This will also help you to find out the weaknesses you need to work with. The primary to consider are revenue sources. Where do you earn income? How stable is it? What are the main factors that momentarily change your income? After answering these questions you need to set the specific amount for the period. Note that your total revenue should not be the budget. For example, If you have a monthly income, you need to take some amount as a budget for a month and keep the value saved for your purposes.
Then it is essential to know your mandatory expenses for the period. For example, let’s take a month. You need to know what the main expenses are during the month and track your spending. It will give you a more clear picture of how much money you spend on duties and how much you spend on personal habits. After observing several months, you will be able to set mini-budgets for each of the spending categories to avoid extra expenses.
It is also significant to save for retirement. Here you need to have a specific aim. For example, you need to save 10 000 USD at the end of the year. You can create a bank account for that to get some extra benefits too. And finally, never pay bills on the last day of the deadline. Create a habit to pay for everything on time or even beforehand and make a good credit history, because no one knows how it can help you in the future.
It is very effective to change your financial aims after some specific period. It will make money management less productive if you have the same aims and budgeting strategy for years. It is better to make a 1-year stable plan and include your habits, expenses, categories of spending, and savings. Increase the difficulty of aims every year and it will improve your money mindset.
Quiz - Am I Good At Managing My Finances?
We have talked about how you can improve your money management habits for the future, but at what stage are you currently? Answering simple questions will give you a clear picture of your needs, strengths, and weaknesses.
- How do you manage your money? - do you write a budget according to spending categories or do you just wing it? - before answering think about how often you check your balance and before the next salary, how much money you have in your wallet. If you check rarely, you need to work on that.
- What is the best thing you love to spend money on? - answers like traveling around the world are not right. Here, think about daily things which you do for yourself or for others, like buying some gifts or making cheat days with snacks, or just extra shopping, without need. Monitor for several months how much have you paid for no-need activities. As often as that, you need to learn to manage.
- If you received an extra, high amount of revenue, what would you do at first? - If you would pay debts at first, it is the right decision but if your answer is to go on shopping and spend on something you are not in a rush to need, then you need a bit of discipline.
- Are you patient or impulsive? - This is the key question that determines why you manage your finances correctly or in the wrong way. If you are impulsive and setting goals is not on your daily ‘to-do list’ then you need some training in money management. If your answer is patience, then congrats, you will be able to manage all these challenges much easier.