Fundamentals of personal finances - retrieve the control over your money.

 Are you one of the people that lives from paycheck to paycheck? You've had enough of this and you want to change that? Then this post is for You. Below I'll share with you few easy "tricks" that surely will improve your financial situation. So let's start from the basis:

1)  Strictly specified home budget.

You won't be able to prevent your money from disappearing if you have no idea where exactly they disappear. Home budgeting will help you to track down the biggest enemy of your personal finances which are uncontrolled expenses.

How do you start home budgeting? In the very beginning it will seem very annoying, because the best way to figure out where our money disappears is to write down all of our expenses and gather receipts if possible and then in the end on the month work with this data.

After first month we should already notice some "red lights" and we will acknowledge the fact that we spend way too much money on certain things (what things these will be varies for each person, for one it will everyday coffee in the city and for another it will be all possible streaming platforms subscriptions etc.) If you will already notice which thing is it for you, then you should immediately cut or reduce it. Sounds easy, but majority of people are not doing that.

After roundabout 3 months of registering your home budget like that, situation should become clear enough, it is certain that we will figure out that for expense A, B or C we spend way too much money and we can easily reduce or cut these expenses without sacrificing the quality of our life. Suddenly instead of living from paycheck to paycheck we will even start to gather some surplus. If we reached this moment and we know exactly what are our monthly expenses then we can proceed to the next step, which is also budgeting but less annoying and time consuming.

The next "level" of budgeting is characterized by the fact that it is stable and same each month. Thanks to the fact that last 3 month we perfectly acknowledged all our expenses, we can afford that. For example if we assume that someone makes 5000$ per month then this budget could look like this:

2.000$ Investing/Savings

1.600$ Food

1.000$ House fees

200$ Holiday fund

200$ Pleasures fund

If the budget is well thought and you will hold onto it then your financial situation will vastly improve.

If despite the fact that you follow everything you read above you still have a feeling that your money is disappearing somewhere then below I will list probably the most common places where it happens.

1) "Daily" shopping

A lot of money we literally throw into the garbage, by wasting the food we buy. We buy way too much without any restraint, how to prevent that?

-Do not go shopping hungry. This is very easy and in the long run will save you a lot of money. Why is that? It is scientifically proven that if we go shopping hungry, we buy way too much food. This "too much" is usually what will end up in garbage. Hunger creates an illusion that we can eat more than we actually can. 

-Always go shopping with the list and buy only what is on it. This habit will not only save you money but also time. If you will go shopping without the list you will also probably end up buying too much food.

-Additionally you can save on a daily shopping by being part of loyalty programs or using Cashback features.

-Stop buying bottled water, buy water filter instead.

2) Streaming platforms or any other subscription based features.

I am far away from telling you to not watch any TV shows, I personally enjoy it too but the point is to make you realize that A LOT of people are paying for subscriptions (few at once) that they barely or never use.

Figure out if you are not one of these people and answer yourself how often realistically you use certain subscription based features? Or maybe you subscribe something, you set auto renewal and you simply forgot about it and your money are disappearing each month? Your task is to check all of your subscriptions and reduce them to absolute minimum, that minimum that you will actually actively use. Do not pay empty subscriptions!

By following advice included in this post you will "release" some of your money and you won't have to worry anymore if we can survive until the next paycheck. We know exactly our expenses and it turned out that there are money to be found for saving and even small pleasures - it is a great start.