Personal finance

You can make a lot of money if you do not know how to manage your money, you will encounter difficulties. To manage well your finances is essential to advance and not to be a simple average consumer or even worse to be prohibited from banking. First of all, you need motivation and willpower. If you are about to get your finances in order and optimize them, it’s probably because you have a plan in mind. You need motivation. This motivation can come from goals that you have set, such as becoming financially independent, leaving your comfort zone and going around the world next year., buy an apartment. Whatever your goals, do you find a reason or several valid reasons why you need to optimize the management of your finances. There are plenty.

Wages do not make wealth

Touching high pay every month does not automatically make you rich. Just as being paid more modestly does not necessarily make you poor. “All that matters is the proportion you put aside from your salary.” Your personal savings must follow the principle that they are worth more than your investments. “Pay yourself first before placing money”. The best investment decision would be to impose a high rate of savings. This provides a huge margin of financial security.

Save a little more each year

The trick is to increase your savings rate with every increase at work, for example. And the enrichment strategy will remain incomplete if you do nothing to improve your professional career. “Too many people are stuck in this state of mind that they cannot find a better job, take on more responsibility or earn a higher salary. It’s insane. Moreover, no one should think about retirement, but each of us should aim for financial independence. “The goal should not be to do everything to get out of the sun. But rather to reach a level where you no longer have to worry about money.

Money outflows or expenses

This corresponds to every transaction where you lose money. These are your current expenses such as rent, shopping, transport, telephone … But it can also be a week of vacation punctually or money that you spend on an investment or a credit that you repay for example. In short, it’s negative on your account.

Inputs of money or income

This is every time you make money. This is usually at your salary and is often fixed but can also be variable. If you are not in the rat race, you still have money entrances. In fact, the salary is a cash entry, but the money inflow is not necessarily linked to a salary. Example: interest of a stock market investment, rent of an apartment, income from an activity on the internet, sales of furniture you get rid of … In short, it is positive on your account.

The concept of assets and liabilities

Indeed, if you spend money to buy a consumer good whose value will diminish over time, it is not the same thing as buying for the same price a case of wine or a work of art whose value will increase. Yet on your bank account, you may have spent the same amount. Similarly, if you are lent money with a 5% interest rate and you earn money it is not the same.

Yet you will have the same money entry at the moment. You must know how to differentiate an asset from a liability. An asset is something whose value will grow or is likely to generate income. A liability is an expense whose value will decrease. The passive is ephemeral and easy, while the asset is patient and thoughtful.

The importance of savings

Saving makes it possible to build up capital. This capital will then finance any project. This can finance the acquisition of an asset or not. Simply saving is beneficial in the sense that it opens up possibilities and allows you to see each savings a little further. Be careful, saving is very useful for managing your finances, but keep in mind that saving is not an end in itself. Saving for saving is futile.

Establish a budget

To manage your finances, I advise you to establish a budget. Establishing a budget can be done very simply. You must avoid the gas plant and do something simple, clear and legible in order to appropriate it.

Here’s how to make a budget in a few steps:

• Take a sheet and a pen
• List all of your cash entries
• List all of your cash outings
• Define what is fixed and what is variable
• Set your savings goal
• Reduce variable expenses and limit unnecessary expenses
• If you want to deepen you can create categories (leisure, food, house, transport …)

Your budget should not be too restrictive

Be regular and go step by step. If you want to protect yourself into the future, you can establish a forecast based on the existing and accumulated savings. Be careful, saving does not mean living in deprivation all year long. Nothing is good in excess. It’s the same as with food. Rather than impose an ultra-restrictive diet and make a “yo-yo effect”, eat healthy continually giving yourself some pleasure from time to time.

Write all your sources of income

The first rule of debt management is to know your net income. You had to know how much money you make per month to know how to properly plan your expenses. The question you had to ask yourself is: how much income do you have and how much do they bring back to you per month?


Following your budget is important, but we do not want to spend too much time on it. Make permanent savings transfers at the beginning of the month then pay the rent or refund your monthly payment if you have a loan to repay. These actions there, you can do them at your bank.

You simply have to focus your purchases on the goods needed for life. Now, before buying, ask yourself if the product you are buying is vital. If you do not really need a product to live, do not just buy it.

To be successful in your personal finances, you must change your habit and start looking at your money from another angle. You had to write your different sources of income and especially how much each one of them brings you.