How to manage finance

Understand your income

Most people can tell you how much they earn over the top of their heads but do not have an idea of their total expenses. When you know how much you earn, you can subtract the expenditure from the earnings. The result you come up with will let you know whether you need to reduce your expenses or you have enough to increase your debt payments and savings.

Consolidate your debt

If you have many debts in the form of student loans, credit card debt, car loans or mortgages you can try to consolidate them in an attempt to get the interest rates lower. Various unsecured loans allow you to consolidate various debts to provide for more convenient interest rates.

Do away with unnecessary expenses

Regular unnecessary expenses make up 70% of the expenditure of most people. A daily $3 expense for a burger at the restaurant translates to $1095 a year for the purchase of something that you do not need.

Create an emergency budget

Unprecedented matters that require money can be disorienting to the budget. It is essential to set aside funds in case of emergencies like hospital bills or emergency travel expenses.

Develop a saving culture

Establish a financial target that is time-bound and breaks it down to monthly or weekly saving targets that are easy to achieve.

Keep track of your credit rating

Your credit rating is what qualifies you for loans that can be used for business or development purposes. It is important to keep an excellent rating so that when the time comes and you need a sum of money, you will not be devoid of options.

Steps to better business and corporate financial management

Corporate finance management involves the maintenance of liquid assets to cover liabilities and ensuring that there is extra cash invested for interest while limiting risks. The following steps will help you in the journey of better corporate finance management.

• Always check your accounts every morning to keep track of your bank balances and all transactions that have not been tabulated.
• Keep all the money that remains from operational cost budgets in investment avenues like repurchase agreements, treasury bills and any other money market instruments available to your company.
• Tabulate every investment maturity date and allocate every maturity amount to a bill that you need to pay, e.g. taxes, employee salaries, insurance premiums, office rent, and any other predictable cost items.
• Develop short and long-term capital management plans. When you plan your daily cash transactions according to your records from the previous years, you can be able to manage your corporate cash with better efficiency. You can plan on using the capital to allocation on operation costs or investments opportunities so that the capital is always making money for the company.
• Monitor and forecast the company's future needs for inventory or payroll financing and try to settle them beforehand by locking in high-interest rates on investments if you expect the rates will decline in the future. Most large financing requirements need at least six months preparation hence anticipation of future expenses is an important step of corporate financial management.

A good corporate financial plan outlines measures that are taken to ensure the accumulation of money for seasonal expenses and identifies when a company needs to borrow funds to finance daily operations.

Professionals who are procured by companies to help with finance management are called economists and financial planners.