do you think that if somebody earns $100,000 a month they are rich if at the end of the months he has no money at all or even in depth well it turns out that this person is not so rich it doesn't matter how much you earn $10,000 a month 100,000 or even a million if you don't know how to manage your money you won't be rich how many millionaires spent absolutely all their money and then still get loans for expensive things you think I'm kidding have you heard about MC Hammer Hammer made over 30 million do on his sons in 1991 but 5 years later MC Hammer declared bankruptcy T of million of dollars turned into million of dollars in depth I don't think you want to repeat his story that's why in this video I'm going to tell you how properly manage your budget whether you have a th000 or a million bucks you need to know how to manage your money correctly be sure to like And subscribe and here we go one of the typical mistakes when starting a budget is trying to get reach into a variety of financial strategies however before jumping into such important steps you need to understand your current situation the aort the first step in managing your personal finances is to figure out how much income you have this is essential in order to have a clear idea of your options and understand what fonts are in your control next you need to calculate the amount needed to cover basic needs such as paying for rent food and other necessary expenses these categories form the basis of your budget and without taking them into account it is impossible to manage your FS effectively to simplify the task it is recommended to create a basic table in which you should enter all income and your expenses this will allow you to see the big picture and help you determine how much money is left over for other needs or you can write out all income and expenses in special apps we've talked about them in our previous videos so go ahead and take a look at them when the main expenses are taken into account it is time to plan how to manage the remaining funds this decision requires a realized approach because you can either spend your money on entertainment or put it aside for the future it is important to think ahead of time about what purchases or Pleasures will bring you more joy and benefit you in the long run this decision ultimately depends on your goals and priorities but it's important to remember that managing your finances wisely is the key to financial stability and confidence in the future planning allows you to control your spending and avoid situations where you don't have enough money for the essentials and the end of the months in order to manage your finances effectively you should always separate your spending into necessary and emotional expenses this is an essential principle that helps you to avoid unnecessary spending and plan your budget better but I think you agree that it's not that easy to do it because the temptation to make an impulsive purchases exists for everyone for instance you may face a tempting offer to buy Goods at a discount or suddenly decide to go to a cafe with your friend such decisions are often made under the influence of emotions and can lead to your overspending that is why it is important to plan your spending in advance and clearly identify necessary and secondary expens so how to organize the budget correctly now there are many options of budgeting but I will tell you about the most popular one this is a 50 3020 system this approach helps you to correctly distribute your income according to this system 50% of your income should be allocated to mandatory expenses these are categories that cannot be ignored such as rent paying bills buying groceries and so on 30% can be used to the emotional needs such as entertainment shopping going to coffe and restaurants and finally 20% of your income is recommended to be put aside for savings or use to cover your depths if you have any with such plan you can maintain a balance between needs and Pleasures without forgetting about the future another important aspect of financial planning is to create a so-called Financial caution a financial safety caution is like a reserve fund created for Life Unexpected situations everyone should have a financial caution as no one protected from any kind of emergencies a financial caution will be very useful if you are unexpectedly fired from your job or temporarily unavailable to work for any reason this font allows you to maintain your usual standard of leing giving you the necess Neary time to find a new source of income having a cash reserve for several months greatly simplifies life and gives a sense of Financial Security the optimal size of such a caution is from 3 to 6 months this is the amount that will allow you to feel confident even in case of job loss or other financial difficulties so just multiply the amount you spend per month by six and this will be your financial cashes for a half a year if you have already saved a necessary amount it would be a good idea to protect this money from inflation in previous videos we already explained how to do this but what to do in case if you have any depths or lanss it is unnecessary to approach their spread and repayment in the right way to avoid unnecessary stress and financial losses start by analyzing your finances and clearly understanding your object obligations do not just move different amounts to pay off your debt in an uncertain time frame hoping that things will improve over time instead move in a Mindful and planned way the first step is to collect full information about all your depths carefully review each of your obligations including loans credit card depths and other Financial situations write down the amount of each your debt interest rate and and repayment terms once you have all the information you need proceed to create a Dept repayment plan based on your findings determine which depth you should start repaying it usually makes sense to start with the depth with the highest interest ratees paying off this loans will allow you to save a lot of money and interest and get out of depth way faster if you get a chance try to make extra payments on your debts above the minimum monthly limit this will help to speed up the repayment process and reduce the total amount even a little extra money can make a big difference in the speed of getting out of your debt we've talked about budget Vision Financial caution and depth to end I want to give you five important tips for effectively managing your budget and reaching your financial goals first before you make a major purchase give yourself a time to think about it if you like an item in the store don't rush to buy it right away come back to this issue in a few days and decide if you still need this purchase this approach will allow you to avoid any impulse purchases which are often based on the temporary desire rather than on a real need this will help reduce the emotional cost and make your purchases more considerate second make a shopping list before you go to the store this will help you to avoid overspending and not buying unnecessary items it's also important to eat before going grocery shopping as a hungry person is more likely to make impulsive purchases if you make a list in advents and follow it it will help you to keep from spontaneous purchases and save your money third spend less then you earn seems simple and straightforward but for some reasons many people still don't follow this rule even if your salary seems significant you may still be spending more than you earn review your expenses and try to reduce them you may be surprised to find out how much money you spent on things that aren't that necessary try to identify and reduce unnecessary expenses this will help to improve your financial situation and release funds for more meaningful goals Force set Financial goals saving without a specific goal can be less motivating setting clear and a tangable financial Target helps you to focus on achieving what you really want as an example perhaps you dream of a new car a trip around the world or even just buying a new laptop having a specific goal will not only make the process of saving more fun but it will also help you better manage your finances by directing them towards your dreams and finally one last thing avoid Lawns unless it's a very critical situation Lawns can be expensive an advertisement often promises tempting terms such as getting today pay tomorrow however there is often a second side of the story high interest rates and difficulties in repaying the loans use credits only as a last resort and try to live without them try to plan your finances in the way that minimizes the need of loans and gives you better control over your money these tips will help you manage your budget more effectively reduce unnecessary spending and move towards your financial goal with more confidence and peace of mind we have even more videos about cryptocurrency finance and earning on our channel so go ahead and take a look at it I hope you found it useful and thank you for watching like And subscribe the talken team has been with you and we'll see you in the next video together to the top