There are wide various ways for Financial management. Many individual face problem in managing their finance. Financial management is not a topic that is being taught in many schools and even a lot of business owners and corporation’s runners have problems on how to manage finances.
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Some individuals working as government officials do not plan for their retirements and at the end have problem in living conditions while a lot of companies have gone bankrupt just because they do not know how to manage finances. Financial management looks into business financing, personal financing, public finance and corporate finance and other types of finance.
Financial Management functions
The capital in running a business needs to be managed just the money used in taking care of homes and family members in personal financing needs to be managed to. How do you manage finances? There are tips listed below in ways to manage finances properly to avoid any future loss.
- The first thing any individual or corporation should learn how to do is panning budget. Budget gives you the guidelines and road maps on how your money should be spent. How do you get your budget planned in managing finances?
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- You should keep track of your expenses for some weeks or at most a month. Try as much as possible to write down all what you spend your money on. Every little thing bought should be written down.
- After this period of time, you can decide to keep stock of all what you had bought in a pattern that is well meaningful and easier to understand by you. Arrange them to see the important once and the non-important once. Note the tax, bills, investments and savings, debts. Calculate all the expenses in that particular month and check the monthly income for difference
- You can now write your budget in order of preference and try as much as possible to ignore all unnecessary expenses that would be an hindrance in get a perfect budgeting
- Be honest with yourself. Try as much as possible not to dip hand into the amount set aside for savings in the budget. You should make sure you don’t jeopardize your budget because of your love for junks or any unnecessary spending on things that do not concern you.
- Try as much as possible to keep track of the budget. At the end of that particular month, try it again and repeatedly, you will find out that you had actually be spending more than the monthly or daily income.
- The second thing is learning how to spend the money wisely. Any money borrowed should have something tangible it is used for. The debt should be used to create funds and capital not to be spent on things that do not matter. Here are some tips too
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- Do not buy what you can borrow or rent just because you have money. There are some commodities or services that can be borrowed and used at once, rendering it useless after it has been used, this type of commodities shouldn’t be bought, and it should rather be rented.
- Make sure funds rented are well accounted for.
- Always try to make an investment. To manage finance basically talks about investment as this aspect would be an income generation for the individual for a very long period of time. This can be done by getting attached to many investment options that are profitable. The higher the investment, the higher the profit.
- Another important aspect to look into very well in the financial management is the savings. Savings has a lot of benefit. A lot of people save money for speculative reason that is for the purpose of using it pay bills or tax while some save because of precautionary motive that is for unforeseen circumstances. Savings is attained by putting away excesses, hat is extra incomes and money left after the budget has been made, if there is budget surplus, instead of using the money for unfruitful things, the money can be saved. For example if you plan $40000 for your budget but the end of the month, you were able to spend $32,000, you can as well save the remaining $8,000 in banks for future purpose.