The first step is to know exactly where you stand financially. All of us sometimes spend more than we intend to, or save less than we should.
Try asking yourself the following questions:
- Can I achieve my financial goals?
- Can I afford to save for my, and my children’s, future?
- If I borrow money now what position will that put me in?
- I already have a lot of debt, do I need to do anything about it?
To know what answers you can give, you need a clear picture of how you budget, and you need to know the difference between your income and your expenditure:
Income – Expenditure = Surplus or (Shortfall)
You probably have a general idea of how much money you get each month and know it all gets spent, but working out a detailed budget will help you to see exactly where your money is going. It’s easier to see then where you can make savings if you need to, help balance the books, or to give yourself some spare cash.