The most important step in avoiding money worries and financial problems is to draw up a budget and stick to it.

Making a budget is not as difficult as it sounds. Here's how to create a good budget:

The most important rule, even if it seems obvious, is often disregarded. You have to get at least as much money in as you get out.

First of all, make a list of your total monthly income and all monthly expenses. For income, include all sources of income such as various salaries, student grants, pocket money, alimony, etc. For expenses, calculate electricity, water, rent, food, leisure time and instalments to be paid.

To make this list accurate, write down all your expenses to the cent every day for the first month and collect receipts. Find out whether your total income covers all your expenses. If not, you will have to cut back on some of your expenses.

 

To reduce your expenses, start with small amounts wherever possible. Set a limit for your phone or mobile phone bill, calculate your food costs, etc. Cutting back a little everywhere makes a big difference. You may have to change your wasteful habits and live exactly according to plan for a while.

 

If possible, include an extra category in your plan to set aside some money each month for emergencies. In the event of unforeseen circumstances, it is important to have a financial cushion to avoid financial difficulties.

 

By sticking to a budget plan, you can make it possible to achieve future goals, finance holidays or buy a new car. The key is to stick to the plan exactly and not let your money sit too loose.

With proper planning, you can pay off all outstanding debts over time, provided you don't take on any new ones.