Managing personal finance

Are you having sleepless nights worrying about your financial situation? Do you shudder when the bills arrive in your mailbox? At first, you may think of ways to cut down on your expenses or increase your earnings. However, soon, you realize you are getting deeper and deeper into the red well of financial debt. If you use your credit cards a lot, it is a heavy burden to pay high interest rates on your purchases. What can you do? Read on.

This is a very simple and effective practice but not many people do it. Why? The reasons are various but an educated guess must be that they are lazy or they do not believe that something so simple can right their off course financial ships. Keeping track of your money is the most basic step to successful financial management. Why do companies spend so much on accountants? Imagine. If there are no records of their revenues and expenses, how can a company run efficiently? In the same manner, think of yourself as a company.

Draw up a simple accounting chart for your expenses and revenues. By charting your money, you will be able to adjust your spending so it does not exceed your income. Just the act of putting it in black and white will cause you to be more responsible for your actions. Do you know why people read the newspapers even when they have watched the same news on the TV? If you read it in words, it becomes a fact. Keep a balance sheet. Do it today.

Do you remember the last time you watched a commercial about a new and exciting hamburger with steaming 100% beef patties and fresh gleaming lettuce and buns that look so perfect fantastically dressed in a new secret sauce and you feel your mouth water? The next time you go to the burger joint, you have forked out your hard earned cash and consumed the advertised hamburger which looked nothing like the one you saw on TV. Still, you felt a pang of momentary satisfaction upon eating the hamburger which costs 20% more than an ordinary hamburger. This is called emotional spending. Many things we buy are bought on emotions.

The folks behind the advertisements are paid good money to sell these products and one of the areas they tap into is the emotions of the consumers. Do you think you can play basketball like Michael Jordan just because you wear Air Jordan or be like him just because you drink Gatorade? These are lies but as long as people keep buying them, the advertising people will be happy to tell another one. As a consumer who is bombarded by at least 10 advertisements a day, be wise and practice self restraint. You are not an animal. Learn how to control your emotions.

Get a grip on your financial situation. Follow these simple ideas and you will find yourself less stressed. As a result, your sleep will be sweeter.


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