More and more people drift into financial problems these days. With the unprecedented challenges we encounter these days it gets even harder to avoid financial hardship.
In this part of my blog I want to give a few little hints how to get on top of your financial situation and stay there.
1.Know your balance
Do you know what your balance is? I mean really, do you have an idea if your income is covering your monthly cost?
Thats the first and most important part of getting in control. I for instance use a spreadsheet to see what’s coming in and what’s leaving my accounts. It consists of several tabs and the one of the most important one is to collect what is coming in and going out per month. Here an example of such a list:
It is very simple:
Date: when the booking took place.
Category: what typ of expense/income is it? In the Image you can see some example categories like Rent, Gas, Rent, Mortgage, Salary etc. but you can configure it and add other categories as your situation demands.
Purpose: The purpose / reason of the in/out position
Amount: the amount of spending / income
In another Tab of the sheet we collect the monthly income / expenses and generate an overview what is going on. The bottom table adds up the expense categories. The next one the income. And the last one produces a monthly balance and an accumulation over over/underspending. The graphic just displays it in bars so you quickly see what’s going on.
In our example case here you can see we are overspending by 98€ in January.
With this little tool you can get control over your spendings and see what your balance over the months is. To check it out download the MacOS Numbers spreadsheet and a version for Excel for this first part of the finance blog.
But that just brings clarity what you spend your money for. So in the next blog I will show you how you go through your expenses and find redundant or possibilities where you can save.