Is there a certain method to exercise control over the money we earning and spending in a month? Yes, there is a way.

The following five golden rules will tell you how to manage your money daily. It would have been better if these rules were taught to us in the school itself, because we feel the stress when our debts go on increasing or when we are forced to live on a tight budget anticipating the next paycheck, without any improvement.

These are the five golden rules to be followed for efficient daily management of your funds:

  • 1.First pay yourself.The best method is to set apart a certain sum of money as deduction from every paycheck. When the money is not visible on your bank account, it will not be readily reachable and you are less likely to spend the amount.
  • 2.Make a plan of your expenses and adhere to it.When you are not spending according to a preset plan, you will have to take a retrospective view to manage your funds.
    There is almost no way to recover an amount once it has gone down as an expense.
  • 3.Always maintain some amount as balance at bank.Reconcile the balance in your account with that shown in the bank statement. The balance as per your checkbook is the actual important factor, because this has been arrived at after deduction of all your checks and payments.
  • 4.Keep a register for cash transactions.This is similar to the register kept for the checks,
    but you will be entering all your cash receipts and payments in the book. It is relatively easy to visit the ATM to draw cash from the account. You will have spent the amount in a few days and have to go back to the ATM to replenish the cash balance in your wallet. Irrespective of the nature of the small expenses occurring a few times in a week, ranging from $ 50 to $ 100, when these are added up over the year will represent a considerable amount.
  • 5.Avoid the use of plastic money.Though the use of a debit card or credit card seems to be convenient, it becomes a habit over the course of time. A transaction is likely to become unnoticed; usually people obtain the receipt from the ATM machine and just put it somewhere without having to look over it again. Sometimes they are in a rush so that they will sign the receipt for the credit card without even checking the totals.

    Even if you regularly pay the monthly credit card bills, you are likely to spend 15 to 30 percent more. If you make cash payment, you are spending only the money that is available with you. Reward credit cards are bound to attract, but with cash purchases you are likely to spend less, and the money thus saved over a period of time will exceed the value of such a reward given by the credit card organization.

    The basic concept is to avoid expenditure over your income. This may look easy but is not often so, but if you adhere to the 5 golden rules to manage money daily, it will be easier for you to face your personal problems of finances. The aim of these rules is to help you to keep in touch with the real facts about money management. When you are faced with this reality you will be able to take important decisions concerning the funds.

    When you are very close to implementation of all of these rules, you stand a better chance of success and stability in financial matters. Do not recede if you cannot implement all the five rules. Habits die hard, they say. Take up with one rule at a time; when you begin to be aware of the results, you will be encouraged to adhere to all the five rules.