Income and expenses and their accounting

The first thing I always recommend to people is to start making their own personal budget, keeping track of all their income and expenses and dividing them into different, self-created categories. For the categories and their planning, we will be more concerned with the budget planning section, but for the time being it is enough that you should definitely allocate those payments that are unavoidable and definitely needed, such as rent, utilities, telephone, internet, and more. other such payments.

You should then also separate all the credit payments and keep a separate account of all your food spending so that it is clear how much money you spend in each of these categories and ultimately create separate categories of entertainment and spending related to recreation. All of these categories will definitely allow you to better understand how much money you spend on different purchases and then let you see and analyze how to reduce these costs and where you could save money.

But even before you start counting your expenses, you should already list all your income, because without knowing exactly how much money you spend every month you can't plan how much you can spend. For most of us, of course, the only income is just the salary and therefore the monthly income will be exactly that salary, but there are different things like halturs, tax refunds, gifts, bonuses and other things that can increase your monthly income , and even if this money is not planned, it should be listed, because then you will see exactly how big your income is every month and how to take the next month's budget into account.

After recording your income, the main step is to keep track of your spending, what you need to do to know exactly where and how your money is going and what you have to spend on your hard-earned money. Expenditure tracking can be different and can start with counting one category of expenditure, or one where you want to make changes, such as many people counting how much money they spend, visiting a restaurant, and then seeing how much money to go for such visits, they try to limit them. But it is even better if you can list all your expenses from food expenses to rent and household goods.

To be able to list all the expenses in this way, you need patience and self-restraint, because you either have to go to a computer or paper sheet once a week or once a month and count all these expenses from the bank account statement and the checks you collect, you like shopping in cash. And here, too, we find ourselves in the toughest stumbling block of budgeting, which is the accurate accounting of all the expenses.

None of us, however, wants to collect all the checks and list every purchase we do on a daily basis, but it should be and if you really want to start managing your finances rather than letting them control you, then you will have to take this job and start counting all your expenses . The accounting process itself is definitely not enjoyable, but by forcing yourself to do it you will gradually begin to think about where and how you spend your money, because after you list all the unnecessary purchases you will definitely feel bad and if you can already make these purchases to get this feeling then you are already on the right path of financial independence.

Even if you don't do anything more than just keep track of all your expenses and savings, this process will be a good start, as it will make you keep track of all the data you record from time to time.