How to increase the difference between earnings and spending.
Healthy is wealthy. But is your wealth healthy?
In the previous chapters we have discussed what financial well-being is and and how you keep a check on your financial health. You must have contemplated on your financial health by now. Now is the right time to learn to maintain a balance between expenses and income.
A Chemistry between income and expenses
A Chemistry between income Managing money can be quite a task if not done in an organised manner. It’s not surprising to stress out when one dives into the sea of reckless spending. However, just like everything in life, you money also needs to pass the balance test and expenses. Lets see how!
Know Your Income & Expenses
The first step of course is to know your money. Research well about your expenses. Calculate all the sources of income. Don’t hesitate to invest time in this process and prepare a proper spreadsheet for the same.
Understand Wants vs. Needs
Simran needs foods, Simran wants burger.
Raj needs car, Raj wants Ferrari.
Needs are essential, wants are not. To keep a check on your finances, it is imperative to keep a check on your wants in case you are overspending, or otherwise you might invite unwanted debts in your life.
Summer vacations, best friend’s birthday gift, self care spa sessions etc. are some examples of foreseeable seasonal expenses. Take note to plan these expenses while drawing your budget. If your January costs are much higher than February’s , make sure you save enough in the latter month to balance spending ahead.
Think long term
Give yourself a little pat on back when you don’t buy that excessively expensive dress that would have disturbed your budget. Think long term!
Focus on priorities that matter the most.
It all may initially seem overwhelming as you already manage other 99999 things by yourself. Trust us with your finances and be sure to live an abundant life!
To be continued…