Accounting 101 – A Simple Guide to Managing Your Finances

Matthew P Schlanger

We all know managing our finances can be overwhelming. Especially when you do not understand the terms or how it works, it can definitely seem like a daunting task. Luckily, there are a few simple techniques you can use to make your accounting process easier to navigate. Follow this guide to get your finances in order and keep them that way.

Getting started

The first step to managing your finances is assessing your current financial situation. This includes writing down all your income, expenses, assets and liabilities. Make sure you collect and organize any documents related to these financial items, such as bank statements and bills. Once you have an idea of what you have coming in and going out, you can create a budget that works for you.

Creating a budget

When creating a budget, break it down into categories such as bills, savings, investments, and other items with a monetary value. It’s important to make sure you’ve included everything that has a cost associated with it. Once you have done this, you can find out what you can afford to actually invest in each item mentioned.

Categorizing your expenses

Another tip for budgeting and managing your money is to categorize your expenses. This will help you keep track of your spending so you do not overspend in one area. For example, break your expenses into categories such as bills, groceries, entertainment etc.

Easy tracking

Finally, make sure you stay on top of your tracking process. Use pens or automatic tools to track your finances, so you know what is going in and out of your account. Doing this consistently will help you maintain a healthy financial situation.

Discuss more money management methods with financial expert Matthew P Schlanger, CPA.

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