Keeping Records

The 1st step of managing your money is to find out how much money you have and how much money you spend. (inflow and outflow)

Most people nowadays are aware of how much money they have, but are unaware of how much they actually spend. In order to keep yourself free of debts, you should start tracing the inflow and outflow of your money.

For example, your pocket money is RM500 a month given to you by your parents. So this RM500 is the money you have each month. Besides that, let's say your relatives came to visit you last month. They gave you total RM100 as a gift to you. So the inflow of your money is RM600, unlike this month which is only RM500 from your parents. To sum up, all the money that's given to you is known as inflow of money into your account.

Next, I am going to talk about expenses or expenditure. Basically, expenses is the money you pay for something. For example, you spend RM5 a day on food. Hence the food expenses a month is RM150 (RM5 x 30 days). You go to the cinema once every two weeks. The price of a movie ticket is RM7. So total money spend on movies a month is RM14. Next, phone bill. You pay RM30 a month to top up your mobile phone. We will stop here for the your expenses. The total expenses a month is RM150 + RM 14 + RM 30= RM 194.

To keep track of inflow and outflow of your money, you need to do book keeping. Basically, it is just a comparison between the inflow and outflow of your money. If inflow is more than outflow, you have extra money and if the inflow is less than outflow, then you are in debt.

There are various types of keeping records of your money. I'll let your creativity to determine the way you want to keep your records. But always REMEMBER, keeping records is about COMPARISON between INFLOW and OUTFLOW.

That's all for this time, so start managing your money today by keeping records. :)