Understand Daily Finances
Daily Finance Course 101 :
Ask yourself below questions -
1. Do you keep track of your daily/weekly/monthly income and expenses?
2. Do you organize your everyday finances?
3. Do you know your fixed and variable expenses?
- Yes, I use "xyz tool" to manage my income/expense (if you fall in this category then you are already doing a great job, you may want to skip rest of this section and check our "Get Organized" section...)
- No, never thought about this, I spend as necessary and needed
- I don't care as my bank account & credit card always come to my rescue
- Isn't it automatically done by my bank or credit card as they just tell me at the end of the month how much is my balance and how much I owe them!!!
- Any other lame excuse
2. Do you organize your everyday finances?
- Not sure what you mean by organize!!! This is not an event to organize.
- Yes, I have it all figured out. Good job! You are on right track.
- Not really, just takes too much time and kinda boring.
- Ummm, not sure how to do it as I am not good at math.
3. Do you know your fixed and variable expenses?
- Yes, I exactly know what you are talking about. Wonderful, keep it on.
- Dunno what it means.
- Expenses are expenses, how does it matter if it is fixed or variable!!!
Why should I know my income & expenses?
Most of us knows how much we earn, in other words we know our income but the tricky part is to keep track of expenses and savings.
We often hear about the term "balance sheet" especially in reference to a company financial statements. Balance Sheet is a term used to know a Company's financial health. In our case a balance sheet would mean our financial health and can be viewed as below.
My Balance Sheet = My Expenses + My Savings
Why is it so important to know Our Financial Health!!!
Makes sense!!!
We often hear about the term "balance sheet" especially in reference to a company financial statements. Balance Sheet is a term used to know a Company's financial health. In our case a balance sheet would mean our financial health and can be viewed as below.
My Balance Sheet = My Expenses + My Savings
Why is it so important to know Our Financial Health!!!
- To support our family with all necessary needs
- To have a stable and sustainable life-style or living standard
- To maintain status in society
- To be able to sustain our life-style while supporting our family needs in bad times or rainy days
- Above all, to have peace of mind
Makes sense!!!