Managing your finances

Managing personal finances is a set of basic skills that everyone can learn. Money affects almost everything we do, so it is important to have a good understanding of your finances and spending habits. Having your finances under control means that your income is enough to cover your expenses and pay your bills. Having more debt than you can pay off means that your finances are not under control.

Personal financial management involves a number of factors that contribute towards the experience of being in control. Earlier it was thought that financial management basically covers budgeting, keeping record of expenses and saving up money. Yet today it involves a lot more: understanding taxation, having insurance skills, and knowing the terms of the contracts and agreements you have concluded, such as subscriber connection agreements, gym membership agreements, hire purchase contracts and electricity contracts.

As a rule, good financial management means making economic choices. Today, there is a wide array of options in the market to cater for all our needs. The more you know, the easier it will be to compare the alternatives and make choices that suit you best.

Getting started

When you want to gain control of your finances, start with small steps. Know your net monthly income and pay days, and start listing your expenses. Such data will help you plan your spending. Planning your finances is particularly important if you have low or irregular income.