Let’s face it, to survive in this life; we all have to know how to manage our finances. This is one skill I wish schools would inculcate heavily unto students. Many college graduates, though quite knowledgeable in their various fields, have no idea how to manage their money. A lot of them enter their 30s or 40s with barely any savings. Others don’t even know how to file their taxes, needing a lot of help from professionals or ignore it altogether. I made this article as an introductory guide for people who want to learn how to handle their finances.
Track Your Finances Manually
- Make a System
Be consistent. Whatever way you want to log your finances, either through pen and paper or through an Excel file, do it diligently and consistently. I prefer using Excel because it is easy to calculate my expenditures. I also include important information such as dates, the amount spent or acquired, and the kind of purchases I make.
- Carry a Notebook
The simplest way to keep track of your finances is by keeping a small notebook for you to jot down your expenses. An alternative is using your phone. This is more doable for me because I barely carry anything besides my phone.
- Use a Spreadsheet
Microsoft Excel is your friend and it is an amazing friend. Learning how to use it well will only benefit your financial management skill. I find it easier to keep track of my expenses with Excel and an added bonus is its ability to create graphs which makes it easier to visualize my finances.
Download a Personal Finance App
- a. Do Research on the Best Finance App for You
There are many apps available and most of them are free. They range from simple finance tracking to comprehensive asset management. I chose a simple one tracks my daily expenses then I transfer it to Excel.
- Input the Necessary Information into the App
Input your monthly salary into the app, the important bills you need to pay. Include also your weekly grocery list. The more information provided, the accurate it is for the app to track your finances.
- Study its Analysis
Most apps provide an analysis of your finances. The app I use provides weekly and monthly analysis for me to review. I review it to make sure I’m on track with my weekly and monthly goal, make sure I’m not overspending, and then I consolidate the results into the Microsoft Excel spreadsheet. These are just a few key actions that I consider as the first few steps in learning how to manage your finances. There are more steps to be taken to truly take full control of your finances but these initial ones are a step in the right direction. The secret is to stay consistent and to never stop learning. There are numerous resources available for those willing to learn. A great resource is the Internet. It is a treasure trove of information that should be used well.