Financial order is impossible without a well maintained budget. This does not just help form a visual picture of where your money goes, but makes you want to cut down on your daily expenses as well. Having lunch outside everyday may not look too significant until you add up your monthly lunch expenses, which is why you would definitely want to take lunch boxes from home.
If you do not know how to make a budget, there are numerous templates and tables available online. You can also use mobile apps, such as Money, Goobudget and Money Lover, some of which even have financial advice based on your income and expenditure patterns.
It is wise to allot certain percentages of your income for each category of your expenses after around three months of thorough observation, e.g. you could allocate 40 percent on housing and utilities, 15 percent on food, 10 percent on transport, 10 percent on clothing and entertainment, and 25 percent on savings. These obviously vary among individuals, but anything is alright as long as your expenses do not exceed your income.
However, try to allocate more for savings, especially at an early age. You will not just grow a good habit out of it, but also understand why Warren Buffet says, “Do not save what is left after spending, but spend what is left after saving.”
You might find a lot of your friends doing this already, but the smart decision is to keep savings in a high-interest savings account, as bonds or stocks, to make sure your savings are well protected from the effects of inflation.
Personal finance management may seem very intimidating and complicated at first, but just a bit of reading up, trial and error will get your money in order. It is important to invest and save, but do so wisely. You are definitely advised to spend cautiously, but a bit of self-pampering now and then does not hurt either.