When you run a home, it's necessary to know exactly how much money you have coming in and how much money you have going out. What this means is that you have to keep accounts, just like you would in any business. A lot of people feel daunted at the thought of maintaining accounts because they think that they're not very good at math. But the truth is that you don't need to know too much math in order to keep accounts. All you really need to know are the processes of addition, subtraction, multiplication, and division. Most of the time, you may only need the first two.
What Are Your Income Streams for Maintaining Accounts?
Most of us don't have that many income streams. We just have income coming in from our salaries and maybe from the salaries of those we are living with. At times, we may also have investments in stocks or real estate, which give us dividends or rental income. Further, if you run a small business, then your net profits equal your income.
Those are usually all the forms of income people have. It's easy enough to jot these down every month and figure out exactly where your money is coming from for maintaining accounts.
What Do You Spend Money On?
It's when you start considering everything that you spend money on that things get a bit difficult. The fact is that we all spend a lot of money on many different things, from food and clothing to exercise equipment and books.
In fact, the way that the market is set up is such that companies are always trying to attract new consumers. They're constantly marketing their products and trying to get you to buy them. Some people have a higher threshold when it comes to resisting marketing while others have a lower threshold.
What Makes a Purchase Good?
You don't need to stop yourself from buying the things that you need and want. But it is a good idea to make sure that you spend your money on things that you are genuinely going to use. There's no point buying a dress that just keeps hanging in your closet without ever being worn. The same goes for exercise equipment, toys for children, books, etc.
If you genuinely enjoy your purchases, then they are good purchases. But if you never use them, then they will be a waste of money. So, this should be your first step when it comes to maintaining accounts — buying only the things that you will use.
Increasing Awareness About Expenses for Maintaining Accounts
The fact is that once you start jotting down everything that you spend money on, then it becomes easier to buy fewer things. The very act of writing down what you've bought and how much it cost makes you more aware of it. So the next time you go to make a purchase, you'll think a little more about whether it's a good purchase.
The best way to write everything down is to carry a very small notebook—a moleskin perhaps—in your purse or your pocket, along with a pen. If you write your purchases in anything bigger, then you won't be able to carry it around with you, and you might forget to write down what you've bought. So make it a habit to carry a notebook around and start writing things down.
End-of-Day and End-of-Month Accounts
You can sit down at the end of each day and make a total of how much you've spent. Just use your phone's calculator if you don't feel up to adding up lists of purchases. And then you can total up everything at the end of the month as well and make sure that your income is at least as much if not more than the amount you've spent.
Learn More About Maintaining Accounts to Run Your Household Efficiently
Maintaining accounts is likely to help you to spend less as time goes on, but it's not magic. Make sure you at least give yourself six months to get used to this new process and eventually you'll find that your income is greater than or at least equal to your expenditure.