Personal finances are big, really big. People’s very lives and the quality of them hangs in the balance when we are talking about personal financial management. The consequences of taking a wrong turn can be pretty devastating as they will affect many other parts of your life. No matter how big the thing is, in many cases, it’s actually little things that will bring you the results you want. If you want to know more about these little things that can change your personal finances read on.

Track it

This is one little thing that I’m very big on. Many times when I talk to people who are struggling with their personal finances a common theme comes up; they do not know where their money is going. To put it more appropriately people think they know but their situations would disagree. There is no substitute for tracking your money and that goes for both income and expenditure. For many people on a single income, they tend to feel tracking income doesn’t make sense but we tend to find that there are many inflows that people never consider as income but are. As for your expenses, there’s nothing like seeing exactly where your money is going. Just choose a method that works for you. I’ve used an A6 pocket notebook in the past but am very happy with a mobile app.

Save with purpose

Saving is one of those things that we have been told to do from a very young age. So it’s weird that it takes a long time for people to learn to do it. I think this has much more to do with the fact that people do not understand the reasons for saving. I’m not talking about the theory of saving but the practical aspects of saving. What are we saving for? What do we do with the money that we save? So when you do go about on a saving plan make sure you know why you are saving. Even better read this article on what to do with the money you save.

Improve your knowledge

“I’m just not good with money”. This and other statements I have heard more times than I would ever want to hear them. Statements like this are limiting beliefs that have a debilitating effect on your ability to master your personal finances. The beauty of human existence is that people are not born knowing things, we learn things as we grow. So if you have managed to learn a language, any language you can also learn to be good with your personal finances. Improve your knowledge through reading and using the amazing resources available in this day and age.

Respect your money

The commonly misplaced thinking that those who have a lot of money do not place much importance on money is amusing at best. What you will find is that those who have managed to accumulate money have done so because they respect their money. If you treat your hard-earned money any whichever way then you really shouldn’t be surprised that you lose it pretty quickly or recklessly. It may not be much but remember this is money you have earned through some effort or sacrifice. If you are going to hand it over to someone then they must earn it too.

Understand price/quality relationship

One expression of respecting your money is through understanding the price-quality relationship. To get this right first you need to understand what is really important to you. How much do you care about the dishwashing liquid you use? What about the cool drink you drink? What about the deodorant you use? See not everybody cares about these things to the same degree. In some things, there is an acceptable level, a “good enough”. Understanding what this is for you in each thing you spend your money on will help you get the best mileage for your money. The price/quality relationship simply stated means it’s not how much money you have but how much the things you do with it please you that matters.

Use everything to your advantage

I’ve watched with bemusement as people say things like “I prefer budgeting to track my expenses” or “I’d rather focus on making more money than controlling my expenditure”. Look, this sort of thinking is destructive on so many levels. In life, we set up many false dichotomies; situations where we falsely believe two things to be opposed when they are in fact complementary. You will find personal finance success at the point where budgeting and tracking intersect just as you will find it where increasing income and controlling expenditure intersect. So instead of trying to pick and choose methods to use every single available method to your advantage.

Little things which if practised right will make big differences in your personal finances. While they all seem like the right thing to do learning to do them will be more of a process than an event. It will take time to learn and master them but once you do and they start working you’ll be glad you did.