How to Effectively Manage your Daily Finances

A man who spends and saves money is the happiest man, because he has both enjoyments. - Samuel Johnson 

The struggle is real to be able to enjoy both worlds: be able to spend and save money. How we envy people whose pockets are deep and has a fat bulging wallet. They can buy anything they want without getting broke. This negative attitude is the main reason why many people get themselves buried in deep debt.

This article is not about lecturing people why it is their fault they are drowning in debts but to share simple ways how you can handle your finances.

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Record your daily expenses - buy a small pocket notebook which you can bring with you everyday and everywhere. Write the date of the day. Write down the items you purchased or where you spent your money on and indicate the exact amount you shelled out. At the end of the day, get the total of your expenses. Go over it, you'll be surprised that small sums paid here and there will total to a large amount of money when added up. Keep doing it and by the end of the first week, you can now compare your expenses for 7 days, then compare it per week and thereafter you now have a record of your monthly expenses. By daily recording all your expenses you now have a clear eye view what you are spending on. After a month you can group your expenses by category, like how much you spent on your fare, for clothes, for food, for entertainment, etc. You might notice how much you are spending for your Starbucks coffee, maybe you'd like to cut a few your expenses there. A record of your daily expenses will help you manage your expenditures, not only that since all your expenses are accounted for, you have a good understanding where you spent your money and eliminates wandering where did your money go.

Set aside at least 10% of your monthly income for savings - a lot of people have difficulty in setting aside a portion of their salary for savings. It would be difficult at first but if you started practising the habit of recording your daily expenses then you can cut off some expenses that are not really important and use that amount to put in your savings. It would require a rigid discipline on your part to be able to save a percentage of your salary for your savings. Slowly as you are able to save money, then you can set aside a fixed amount for your emergency fund, for your startup business and even for your retirement fund. It doesn't have to be all at once, you can save little by little until you are more comfortable to build up a nest egg for your emergency fund, business and retirement.

Always pay in cash - if you can avoid it don't use your credit card. Plastic money will always be a temptation to buy or purchase items that you will not normally spend on if you are paying in cash. Owning credit cards have become a nightmare for most employees and working class people. Many fell prey to paying only the minimum due amount which is the gateway to being buried in credit card debt. How many people had suffered mentally, emotionally and physically because of harassment from credit card collectors? If you must have a credit card, keep it to one credit card only, to be used for emergency purposes. Pay in full the amount you purchased but the bottom line is, to purchase only what you can pay comfortably with your salary.

Resist on going to that nearest mall sale -- almost every month there are "mall sales". Resist the temptation to line up even before the mall opens up! Most of the time during "mall sales" you end up buying things you don' t really need but you think is quite a bargain. Or you purchase items you already own or have at home. Reserve going to these sales if it is a back to school sale or a Christmas sale. Be a wise buyer and not an impulsive buyer.

Managing your daily finances, requires discipline, strategy, to keep your expenses low and set aside a portion of your salary. It is not a bad practice also to give tithes. If you can give to our less fortunate brothers and sisters, then the Lord will bless you more.

Test me now in this, if I will not open for you the window of heaven and pour out for you a blessing until it overflows. - Matthew 3:10

At the end to effectively manage your finances, it boils down to living within one's means and to be happy with a simple but abundant life.

Have you been a good steward of your finances? Care to share how?

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Middle life is beautiful.

Till next time. God bless.