Proper financial management helps to avoid over-indebtedness. It is also the most important basis for people who want to achieve financial freedom. This does not mean being able to consume without restrictions. But to generate the income that is needed for the standard of living, regardless of the main activity, the state or institutions.
The first step in financial management: Get an overview
The first step towards structured financial management is to create an overview of the finances. This means that you first create a list of all monthly fixed costs.
The fixed costs are then compared with all income such as wages, rental and leasing income, insurance benefits and the like. It is then advisable to use the bank statements to calculate the average cost of living. To do this, calculate how much you spend on groceries, clothing and activities each month.