From my research on personal finance, I’ve learned that many of us don’t want to hear about money management . And even less how to manage your budget effectively . Probably for fear of facing a cruel truth.
The problem with this reasoning is that you will never be rich. To become rich, it is necessary to understand where your money comes from and where it goes. Making the effort to track exactly what comes in and goes out of your account each month is an incredibly important task if your goal is to ever get rich.
This is how you manage to manage your budget in an excellent way.
Unfortunately, not knowing how to manage your money is unforgivable. And sometimes, Laziness and the incompressible desire to simply spend your money without hassle are 2 sensations that it is essential to eliminate before starting your quest for abundance.
Faced with this observation, I think it can be super beneficial to give the tools I use to manage my budget well, easily. Budgeting shouldn’t take you hours. With the advice that follows, I propose to guide you step by step towards managing a family budget, which takes you minutes to keep each week. That’s all.
At the end of this article you will know exactly how to properly manage your budget, and this in a completely automatic way.
What I particularly like about money is that it has this ability to be autonomous. I don’t like to manage my money, I rather prefer to put tools in place so that my money manages itself. That’s the beauty of money.
Let’s see how.
We often forget why making a budget is so complicated. By reducing the number of transactions (money in or money out), you reduce the effort needed to track your money.
But the important thing is not there: the best return on investment is on the money you do not spend. Indeed, outside the HFT circle, any other expense is optional. You don’t need it to survive.
I offer you an example of good management of a budget, day by day over a given month.
Here you need to set your savings goals for the month. You know better than anyone what are the main spending items, usual and unusual, that are going to take place this month. Agree on a savings percentage this month.
The day after your paycheck, your money should start working. Define direct debits, so that on the 2nd day of the month the following actions take place:
Remember, on this date you have not yet paid any bills (water, electricity, rent…). All that comes later. The most important thing is to continue to build your wealth by paying yourself first. The rest can wait.
Only now are you going to worry about your living expenses. I intentionally put the word “concerned” in italics. Because the secret is that if you do it right, you won’t even have to manage this part of your finances.
Indeed, all your living expenses must be paid for automatically. The electricity bill, water, gas, rent, payment for the car… all of this must be managed by direct debits. Even opt for the green option, and no longer receive your invoices by post. Consult them on the Internet.
Thus, your living expenses are automatically paid. You no longer have to spend time thinking about paying those expenses, and you’ll never have to pay late payments again.
Managing your budget well allows you to spend less time managing your invoices, and at the same time reduce unnecessary expenses such as delays for unpaid bills.
We all love hanging out with friends. And we all love to go shopping; it is this jacket on which you have just come across at Jules and which now seems irresistible to you. You must have it.
Stop. Realize that with every expenditure of money you are moving away from your goal of wealth and financial independence: the day when you can comfortably stop working and sip a cocktail at home is moving away with each unforeseen expense. For me, this thought always has an incredible effect – I manage to discourage myself from buying every time.
So how do you track down these 2 problematic budgets? Quite simply, by vigorously reporting each expense in an Excel file.
With outings and the unexpected, there should be no room for doubt – everything must be controlled. You can indulge yourself from time to time, but these pleasures must be mastered and calculated in advance.
Tip: each month define a released budget and a contingency budget. Dose them in relation to your overall budget. Combined, they should not exceed 10% of your monthly income. Thus, you give yourself permission to control these two categories of expenses, and this without completely cutting off your little pleasures in life.
Now that your budgets are made, your HFT expenses (Housing – Food – Transport) are covered and your monthly bills are self-paying, you just have to take a look at your account from time to time. in bank.
To make it even easier for you, I recently discovered a totally free current account management tool.
It’s called Linxo. In a nutshell, this web application automatically organizes your expenses and cash receipts into predefined categories. You can then view all your feeds on the same page. You can see in particular:
This is the top level of financial management. This allows you at the end of the month to do your accounts and compare the result of Linxo with that of your Excel budget, and to have a clear view of the path taken by your money.
I’ve been using this for several months now, it’s great.
Plus, it’s totally free. So enjoy it !
When you have kids…
The difficulty in managing a budget increases enormously.
Kevin O’Leary Famous Investor
Each child you have represents a debt equal to €500,000. This is the amount that a child costs from birth to its first job.
In this way, it seems impossible to respect the HFT circle, given an increased rate of incompressible expenses.
The solution?
Delay the birth of your children.
Indeed, it allows you to save for longer.
By saving longer, you gain wealth.
This gain in heritage will provide significant comfort to your children when they need it most.
It is for example the day when they will have to go to another city to study and therefore pay for the move, the installation costs, the new school…
It’s all about not having children prematurely, that is , without having a solid financial plan in place to ensure that they have every chance on their side to succeed in life.
So, how to manage your family budget?
Quite simply by being far-sighted, that is to say by leaving your children a large enough envelope so that their future is assured.
Only then can you start having children.
Conclusion: managing your family budget is especially important before birth. As parents, you owe it to yourself to provide your children with the very best. This is only possible by having already saved a considerable amount of money, allowing your children to achieve the best possible future.
You have understood how to manage your budget well. And now ?
You have seen the process articulated over 1 month. You now know how to manage your budget automatically.
Repeat this every month, and you will quickly notice several things:
What do you think of this budget management method? How does this compare to your current management?