Reading the statistics, one in three Italians does not make it to the end of the month or in any case, for various reasons, struggles to manage their insurance finances.
I don’t want to criticize those who are unable to balance their income with the expenses but try to outline what a fair process should be, which often no one teaches us.
Almost all of us have lived or live in the anxiety of not being able to meet our financial commitments and among other things, it is not certain that those who earn the most will be able to make it to the end of the month more easily.
In this article
- # 1 – Budget, planning, and independence
- # 2 – Track expenses
- # 3 – Look for new sources of income and cut costs
- # 4 – Help those around you manage their money better
# 1 – Budget, planning, and independence
The starting point is income. How much do we earn, how much do we have at our disposal, do we have an emergency fund to meet urgent and urgent expenses?
Many, especially when they are young, are used, coming from wealthy families, not to understand exactly the value of money and to spend happily. For a long time, I have spent more than I earned, sure of being able to turn to my family in an emergency and used to not having to deal too much with managing my finances.
This is not always possible and it is rarely correct because sooner or later we will have to get used to independence.
Then take an excel file or a sheet, indicate your annual/monthly salary and the fixed expenses that you cannot cut (eg rent, food). Add a part dedicated to savings (10/20%) and divide the rest as you see fit. This is called planning and managing your money.
Once you know how much you can spend per month, maybe divide it by days and even by the week. It is easier to stick to a daily budget than a monthly or yearly one and this will surely help you to not make it to the end of the month without money.
# 2 – Track expenses
There are a large number of apps, models, and programs that allow you to track your expenses and divide them by categories, just to understand how we spent our money at the end of the month and if we respected our plans at the end month.
If you are not constant you can also devise your method to understand where your money is going, you can also use only cash and give yourself a weekly wage. However, occasionally dedicate yourself to analyzing your expenses and to thinking if they have brought many benefits.
# 3 – Look for new sources of income and cut costs
If you don’t make it to the end of the month or you still want to increase your spending, there are only two options:
- Cut expenses;
- Increase revenue.
A few years ago I published a list of expenses to be cut. If you do not arrive at the end of the month, you have to eliminate some expenses, limit them, reduce them.
I’m not a big fan of frugality, however. The best way to live better is to seek out new income. Become an entrepreneur of yourself, apply yourself to work to get a raise, and above all ask if it is up to you.
Don’t stop applying, studying, and looking for new opportunities. Don’t stop saving to guarantee financial income from your assets.
# 4 – Help those around you manage their money better
Your children will thank you and often spend your money.
Your partner has a direct impact on your spending.
So family expenses must be shared and managed uniquely, no matter if one spouse earns more than another, money is common and must be managed as such.