Monday, 16 Sep 2019

The Importance of Managing your Expenses Efficiently

BORROWING money is the perhaps the easiest way of getting out of a financial trouble. If an unexpected expense arises, the first impulse is to use the CREDIT card or to immediately apply for a payday loan. Unexpected expense is also some form of a debt only it hasn’t shown up. If you are managing your finances efficiently unknown expenses can be easily resolved. Resolving unexpected expense with borrowed money is simply delaying the inevitable that sooner or later you are still going to pay off the loan and worst, you will be paying much more than what was expected. To avoid going to a MONEY LENDER, the best thing to do is manage all your financial resources efficiently. The golden rule on managing your finances is “never spend more than what you make”


Budget is the Key


Planning an effective budget will help you manage you expenses more efficiently. With a planned budget you can easily prepare a good ratio between your income and expenses. However, to successfully enforce your budget, you need to discipline yourself to follow the budget system you’ve set up. Having an efficient budget will help you pinpoint expenses you can save money on. More importantly, you will be able to prioritize your expenses according to their importance. Having an increasing surplus will follow suit when you start to budget because you will be able to know which expenses needs to be immediately addressed. When you’ve prioritized your expenses, your remaining income will go to where you want it to go and if you’re prudent enough what would be left should be put aside for emergency purposes.


You May End up in the Vicious circle of Borrowing Money


Not being able to efficiently balance your income and expense may put you in a position where you will keep on borrowing money to fill up income deficits. And every time this happen, you accumulate debt, some of which you might not be able to pay and end up with a bad credit record or worse, end up filing for bankruptcy.