Most people have no idea about manage their money, So you probably know how much money you made, but you don't know how much money you spent. In fact, most of us spend 10% more per month than we make. Well why it so difficult to manage your spending?
Calculate your new worth
Make sure you are on the right track, your net worth should be increasing each year, even if it is just by a small amount. The exercise of calculating your net worth can be very valuable as well. People often discover accounts, investments, etc that they have forgotten about, or need to update.
Spend less than you make
If you spend more money than you bring it, you can't save money at all. Spending less than you make on consistent basis is the key that reaching financial fitness and financial stability. If you are overspeding your income each month, you can not increase your savings, make investment, reduce debt and so on. For a step-by-step process of how to make an effective spending plan, look in the book Money for Life. The very useful book walks you through the process and explain the reason behind each step, in a way that anyone can understand.
Reduce your debt
Use debt roll down principle to quickly reduce your debt. Follow the same procedure when the second the debt is paid off, you will not only reduce the number of years you will have payments, but you will also save thousands in interest if you follow this principle until you are completely debt free.
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