Edited by Thor, Zack, Eng
Hello and welcome to VisiHow. In this video, I'm going to give you some advice on how to manage your money. At some point in our lives, all of us are going to have money worries and as we've all experienced, the feelings of not knowing where money's going to come from or wondering exactly where it's all going. In order to help us deal with these situations, it's important to learn to manage our money so we can understand what we have and what we can spend, and to live in a sustainable way within our means. Not to stretch ourselves, not to get into debt, and not to upset ourselves or cause ourselves distress and suffering because of money.
- 1So the first step is to know how much money you have. It sounds basic but it's a fundamental factor. How much money do you have? When you know how much money you have, you know how much money you can spend. So, how much money do you have, and how much money are you going to earn? For example, how much money are going to earn this year? If you know it for this year, then you can break it down into manageable segments. This year, I have twenty thousand pounds. This gives you a good understanding of what you can and cannot do. So if we know how much money we have, we know the parameters in which we can exist.Advertisement
- 2The second important element of managing your money is to create a budget. We can call it a monthly budget or a yearly budget. A monthly budget is better for management because it makes it more realistic and it helps us to show us exactly where our money is going on how we can make savings, or how we can spend less. If you see every month you're spending this money, maybe it gives you ideas of how you can save it. Perhaps you can spend less at the supermarket or on treats, or there's something else you can do to help you balance your books. There's a video about creating a monthly budget, and you can find a link to that in the section below this video. So take a look at that and that will give you some ideas about how to create a monthly budget. So, a monthly budget will tell you how much money you have and how much money you are spending. Very important factors.Advertisement
- 3Another good piece of advice is to only pay for things when you have the full amount. This way, this prevents you from using credit, from taking credit card or taking out loans. If you try to save up and want to buy an item, such as a chair, try and save that money. Every week, try and save that money. Put in the bank or keep it somewhere safe, and then when you have that exact amount you can go and buy the item. That way, you're only spending what you have in your hand. You're not taking finance, a loan, or paying by credit, because you'll have to pay for this a lot more in the future. This is one way to be in control of your finances.
- 6Keep a record of your finances. And this can be done in the form of a wall chart or something visible. Use color to highlight and reinforce elements. You can create a chart and create a savings pot in that chart where you can add cash to that chart and that can be a pot where you track the savings. So we're linking this element to these two points. If you withdraw a weekly budget in cash, and then you write a record of how much money you have at the start of the week so you know how much you have to spend, then you pay in cash, and afterwards you look in your safe - you know exactly how much money you have and you cannot spend more. You can spend less if you want, but you know that is your personal restriction as to how much money you have.
- 7Another element is saving. Try to save something every week, every month, or every day even if that's what appeals to you. That will help you to always stay one step ahead of any potential disasters. It'll protect you from any accidents or if you suddenly have to pay a large amount of money unexpectedly. This will help you be prepared for that. You want to live quite careful at times, but when something unexpected happens that can put you into financial difficulties because you'll have to pay money you can't afford for something you didn't expect. If you try and save a little bit on a very regular basis, that pot will grow. It will almost grow unconsciously. You put money and it grows, you put more money and it grows, and before long it'll be a sizeable amount. If you can put as much as you can afford personally into this pot, it will just give you a little bit of a cushion in case something unexpected does happen.
- 8Other elements of managing your money are to really understand where you're money is going. So, to analyze expenditure. "Analyze expenditure" means to really focus on where your money is going. A lot of our expenditure is for essential things such as a combination of food, transport to work, and these are the things that are unavoidable. But a lot of our expenditure is superfluous, or things we don't necessarily need. New items, food, or buying things that are more expensive because we didn't want to wait until it becomes cheaper. You'll actually be surprised by how much money can be saved. So if you analyze your expenditure, you might find that you're spending ten pounds a day on some food from a gas station, or on clothes that you don't actually wear. If you add it up every week, maybe you can save one hundred pounds a month. In fact, in about a year you can save an extra one thousand two hundred pounds. These can be small savings, but when made collectively, they can make a big difference to your lifestyle.
- 9And learning to live within your means is also a very important point. "Learning to live within your means" means learning to live in your own personal environment. If you are paid ten thousand pounds a year, you need to learn to live within that. If you make one hundred thousand pounds a year, you should learn to live within that. So that's very important. Not to try to live a lifestyle that you know you cannot afford.
- 10And so, these are some pieces of advice when it comes to managing your money. And we're just going to read over them one more time: be clear about how much money you have and how much money you're going to earn, create a monthly and a yearly budget, only buy items when you have the full amount (and in there we should probably insert "Don't take credit, loans, or finance." Avoid these things and that will help you to manage your money), try to pay in cash, withdraw a weekly budget, keep a record of your finances, save money, analyze your expenditure (and in here, we'll add "Find ways to cut costs."), and lastly learning to live within your means. So this has been a video on how to manage your money. If you have any suggestions on how to manage money or how you manage your money, and want to share it with the community that will be great. Please feel free to do that in the section below. You've been watching VisiHow. Goodbye!
Video: Manage Money
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Categories : Financial
Recent edits by: Zack, Thor