Spreadsheets To Help Manage Money – Do you want to know how to manage money so that it yields more? Read our tips for employees, entrepreneurs and independent professionals!
How to manage your money: 21 tips that will help you have a healthy financial life
Financial stability is a dream of many people, whether they are entrepreneurs or not. But faced with such an unpredictable economy, we know that it is increasingly difficult to plan expenses and save enough to build a wealth, mainly for those who intend to start their own business.
In this post, we share 21 simple tips dedicated to those who wish to have a healthier financial life, even without having a very high budget. If you adopt at least one of the habits to follow, you will see that, over time, your money will yield more and you can invest in the activities that you like the most. But to get ahead: from now on the spreadsheets and calculators will be your best friends.
1. Write down your fixed expenses
Fixed expenses are those we pay every month, such as rent, water, electricity, telephone, internet, etc. It is important to highlight that you must include taxes in the list … that you will not forget!
Having a record of fixed expenses is important to know how much of the family income is left over every month to invest, save or even allocate to rest and leisure.
Likewise, and if you are an entrepreneur, you must also have control over the fixed expenses of your business, such as rent and production costs.
There are several ways to perform this control, but we recommend keeping a spreadsheet in Google Drive or Excel, since in addition to saving, which does not run the risk of losing them, the tool already calculates the expenses and subtract from your salary / benefit.
2. Separate at least 10% of your income every month
Before paying the fixed expenses, try to reserve at least 10% of your income to invest. If you earn a fixed monthly salary, then that means you have to separate it from it, and if you work as a self-employed person, that percentage is separated from all your earnings for the month.
The objective here is not only to save money for a period of time until spending it on something superfluous, but to apply that value so that it can yield interest and become a patrimony in the future.
At the beginning it can be difficult to “abandon” that 10%, but if you focus on the long-term result and manage to adapt your lifestyle without making great sacrifices, in less than a year you will begin to see the first results.
3. Keep your personal expenses separate from your business expenses
This suggestion is valid for those who already have an enterprise or intend to start one. Many small and medium entrepreneurs still have difficulty separating personal expenses from business expenses, which can lead not only to losses, but even to bankruptcy.
This practice is bad because you can not know if your business is making a profit, after all, you are always taking cash out of the box. The lack of capital also prevents you from promoting process improvements and better dissemination, which restricts the reach of your brand.
And finally, mixing personal accounts with business accounts can give a false impression of “wealth” and motivate you to spend more than you can at that moment.
Therefore, we recommend that you have two separate accounts if you are an entrepreneur. The good news is that you can use the legal entity associated with the account to contract corporate plans for your company, such as health, food, etc., which also help when it comes to saving money.
4. Try as much as possible not to ask for financing
Financing is a danger for the small and medium business, since they represent a long term of commitment and high interest.
We know that it is not always possible to avoid them, because they are useful to attract resources in the initial phase of the project. But whenever you need to ask for a financing, keep in mind that the terms are lower, besides studying the conditions stipulated by financial institutions in order to choose the lowest interest rate.
Remember that the financing must also be included in your fixed expenses sheet during the entire term of the contract.
5. Amortize your debts as soon as possible
If you have already obtained a loan in your name, think about paying more installments simultaneously to reduce the duration of the contract and, of course, the interest.
But beware, we are not saying that you must adjust to get rid of your debts faster. The ideal is to use money that is “left over” to advance the fees, that is, nothing to move in the fixed costs or cash flow of your business.
An example of money that can be reserved to cushion debts is a payment for an autonomous job that you have done, for example.
6. Do studies about investments
Investing is a way to make sure you do not spend your money on something superfluous. But when we use the word “investment,” it may seem that we are talking about something that requires a lot of prior knowledge.
Do you think that way too? Well, it’s exactly the opposite!
Everyone can invest, from the most conservative profile to the most audacious. That is why we recommend you to study the different types of investments available in your country and economy. Only then can you choose the one that best suits your profile. Also, talk to people who are well informed about the investment before making your decision.
Savings accounts are successful everywhere, because they are easy to open and quite safe. Savings, in most countries, have the lowest risk of any other type of investment, but they also have the lowest yield potential.
That is why it is recommended to make cash deposits in a savings account to conservative investors, with a lower tolerance for risk.
Mutual funds raise money from different investors and then invest it in a variety of stocks, bonds and other investments. This type of investment is suitable for those people who can invest thinking in the long term.
Unlike the previous options, the stock market is recommended to those investors with a bolder profile. Shares can fluctuate greatly during the period when the market is open, which is why it is a model that carries risk. A deeper understanding of how companies are functioning and continuous monitoring of the stock market are crucial.
7. Establish financial objectives
Before moving on, it is important to know the difference between goals and objectives. Although we use these two words indistinctly, the objectives represent what we want to achieve in the long term, while the goals, on the other hand, represent the concrete actions quantitatively and with a predetermined term.
For example: your goal is to increase sales revenue from your business. Your goals, in turn, can be to double the number of transactions in the next six months, increase the average ticket of your customers by 50%, etc.
Take this opportunity to read our post about how to stipulate goals for your business.
8. Pay as much as possible in cash
This may sound like a cliché, but any finance specialist would tell us that we should only buy something when we have the money to do it.
That’s why paying in cash (or using a debit card, of course) is an excellent strategy to save money, since you avoid spending money that you do not really have, assuming a debt on the credit card.
Many stores around the world offer special offers and discounts for cash payments. This means that you can save money and pay less for a product or service.
9. Avoid using your credit card
This suggestion is closely related to the previous item, since it encourages payment in cash.
Does this mean you should never use your credit card? Of course not!
The credit cards represent a great convenience for the consumer, besides being the most common online payment method. Our advice is to try to avoid using it when you have cash to pay for something. In many different parts of the world, when you make payments (or pay in installments), you end up paying interest, spending more than you would if you paid in advance.
10. Set limits to variable expenses
Everything that is not considered a fixed expense can be called variable expense. Which means that the latter can be paid later.
But we know that, in practice, it does not work like that. Sometimes, people want to enjoy small pleasures, like going out with friends, taking a trip or buying something that is not essential.
For these cases, we recommend that you set a limit to these variable expenses. Reserve a small amount for your leisure activities.
We know that your goal is to save money, but if you end up making too many sacrifices, you can give up completely. Setting small rewards for when you reach a goal can be an incentive to keep moving forward.
Make a list of five items that you consider superfluous and try to include at least one of them in your monthly budget.
Spreadsheets To Help Manage Money
11. Uses financial management tools
If you do not have the habit of working with spreadsheets and need simpler methods to control your expenses, there is a wide variety of programs and applications to help you.
Some of them offer the option to upload the payment vouchers made with a card, follow the banking movement and even insert reminders for the payment of accounts. So, you have control of everything that goes in and out of your account and you do not get caught by surprise the interest paid for late payments.
One of them is Wallet, a service oriented and designed for those who do not have financial knowledge. It is about introducing the financial movements at the same time that we are labeling them correctly so that they are within the available categories. The result is a simple graph that tells us how we spend the money.
Other options are Fintonic, for iPhones and Mint, for Android. Both are free applications that help you control your finances by keeping a record of all your transactions in one place.
To the list we could add MoneyTrackin, an application that follows the guidelines of the previous ones to control personal finances. Its main drawback could be found in the graphic aspect, less achieved than in other alternatives. The interesting thing about the service is that it is also a community of savers, that is why they receive advice from other users to achieve the ultimate goal: to adequately control the money.
12. Look for alternative sources of income
Nowadays, there are many activities that you can carry out at home and earn money. An excellent example is Affiliate Marketing. With it, you promote other people’s products, in exchange for a commission each time a sale is made through your link.
If you are creative and you enjoy creating content, you can start a blog and write about something you like. You can also become a digital producer and create an online course to share your knowledge with other people.
People who own a YouTube channel or a profile with many followers on Instagram can become digital influencers and earn money through brand partnerships, product sales and display of ads through Google AdSense.
To do any of the above mentioned things, all you need is a computer with Internet access. And if you have not identified with any of the professions we suggest, you can find other ways to supplement your income by working from home.
13. Have an average budget
Self-employed professionals struggle when it comes to planning a budget, since they do not have a fixed income or benefits.
Our advice to avoid unpleasant surprises is to make an average of the income in recent months and identify the periods in which you earn more and less, and the effects of seasonality (such as dates and commemorative events) on your sales.
The ideal here is that your minimum income is enough to pay your fixed expenses. For those “summer” months in which you earn more than the average, invest the surplus or save it for the “winter” months.
14. Use the Internet to compare prices
If you do a quick search of a product on the Internet you will see that many different sites sell them and at many different prices.
That’s why, every time you’re about to make a purchase, look for the best price that fits your budget. After all, when it comes to saving money, bargain hunters are excellent, because every penny counts.
There are some tools like PriceGrabber that look for and compare offers, listing the different stores, from the cheapest to the most expensive. Alternatively, you can use the marketplace and ecommerces filters to find the cheapest deals. These two examples apply to physical products.
If you’re looking for a digital product, such as an online course or ebooks, it’s a good idea to search Facebook groups or subscribe to producer lists, keep up with offers and compare prices.
It is important to remember that, in the case of digital products, the price is not the only thing that must be taken into account. The value it provides, the problems that help solve it, if it is a product with high added value and the real cost … everything must be taken into account.
15. Join the credit card rewards programs
The reward programs are excellent for people who want to save money. In these programs, you are rewarded for each purchase made, earning points that can be exchanged for other products and services, such as airline tickets, for example.
Most credit card issuers offer reward programs, and subscribing is usually free.
There are also many reward programs in efe
16. Join the subscription programs
Is there a product or service that you consider superfluous, but that you nevertheless consume frequently?
Then you should consider joining an affiliate program. This way you will save more than if you bought the item separately, in addition to the obvious advantage of getting the products directly in your home.
Wine, coffee, beer and beauty products are examples of products sold through subscription programs.
And when it comes to digital products, monthly subscription plans are like member areas, virtual learning environments, in which students can consume the materials made available by the vendor.
17. Buy second-hand products
With the growing trend of minimalism and conscious consumption, buying second-hand goods is a way to help save the environment and save some money in the process.
There are many second hand stores around the world, with high quality clothing and shoes that are sold at a much lower price. And not only clothes, but other items such as furniture and appliances.
Online you can find a variety of products on websites such as Mercado Libre, Vibbo, Segundamano and AlaMaula. In these platforms, users put the products on sale and the sites act as intermediaries in the purchase process. The same happens in e-Bay and Wallapop, although they also sell new products.
You can also join Facebook groups and exchange products and services with other people.
18. Do not ignore the small expenses
The services that you charge directly through your credit card directly, such as Uber, Lyft or applications and sites that deliver food, can act as traps for people who want to save money. That’s because you spend money without realizing that you’re doing it, and when the bill comes, you’re surprised by many different charges.
That’s why we advise you not to overlook these small expenses. As much as you do short trips in Uber, for example, they can accumulate and become a problem at the end of the month.
As much as possible, walk, and during the day, use public transport. Depending on the distance, it can be much cheaper.
Of course, we’re not saying you should never use shared publishing or shared delivery applications. Just make sure you do not overdo it, or use it when there is a cheaper alternative.
19. Avoid eating out
Eating out can be very expensive depending on where you work or where your business is located. That’s why we recommend you look for cheaper options or even bring your own food to work.
Again, we are not saying you should not eat out when you want to or when you should, but you should try to reduce what you spend in restaurants, if possible.
If you work from home, it will be even easier to adapt to this new change. In addition, you can eat healthier by controlling what you eat and how you prepare it.
20. Choose automatic payments for your accounts
The automation of bill payment is an excellent way to avoid paying late charges. The accumulation of bills is never a good idea, since it makes it easier for you to lose control of your finances. To solve this problem, we have two suggestions: spend less (which is basically what we have been saying in this publication) and, if possible, set the due dates a few days after the payment date.
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21. Save every extra penny
The 21st and last advice is pretty obvious, but it makes all the difference so that you manage your money a little better and make it grow. In a word: save every extra penny you earn.
Do you know that payment that you did not know was coming? As bonuses, distribution of profit sharing, independent work or, in the case of entrepreneurs, a product launch with better results than you expected …
Well, then we advise you to save that extra money and invest it, adding it to the 10% you save each month. Since this extra money is a pleasant surprise, you will not lose it when the time comes to pay the bills.
It is important to remember that the more you invest, the more you earn, which in turn means more money to buy something important or make improvements in your business.
Do we leave any important suggestions aside? Would you like to share what you do to grow your money? Leave us a comment in the section below. And read our publication on how to start selling online from scratch.
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