Managing finances

Working people or those in business earn money from what they do.  A good number of them though have problems keeping the money much more saving them.  When asked why, the common answer is, I’m not making enough money.  When they are told to find other ways to earn money, their excuse is, it is the only way they know to make a living.
 
 

In many cases, the truth is they could be spending more for unnecessary things.  One good example is drinking.  If a working guy drinks everyday three or more bottles of beer that is actually an unnecessary expense.  Drinking once or twice a week should be fine and that will mean savings.

List down expenses Money management can easily be done by listing down what is normally being spent in a month.  From that list, a person should be able to determine where the bulk of expenses go to.  In a household, it will usually be on food, bills, transportation and kids’ education.  The rest could be on entertainment, junk food, personal accessories and habits.

Try to cut down the not so necessary expenses in half.  That will mean having extra money for savings or investment.  For some people, unnecessary expenses can be around twenty percent of the net salary.

Investing

What can be saved from expenses can be put in savings until it reaches an amount that will be suitable for investments.  Government bonds are good to invest in because it has a fixed rate of returns and is guaranteed by the government.  It is almost like a real estate investment.  Short term government bonds are good to start with.  Whatever it earns can be added to the original capital for longer term bonds with higher yield.

Reference taken from here http://www.myfamilyclub.co.uk/money/family-budgeting