Managing money
What does it mean to be “financially well off” or to have “financial security”? These concepts can mean very different things to different people. For most people, it means that they have together and that they are able to make ends meet on their own.
Responsible money management can contribute significantly to achieving these goals. The first step is to review your personal finances, i.e. to establish a personal budget detailing your income and expenses. See Track your finances for information on how to create a personal budget, including a checklist walking you through the process of budget planning/budgeting.
Household budgets explained: How can I keep track?
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There are two ways to optimize your budget: You can either increase your income or reduce your expenses. Your income (and how regular it is) will depend on a number of factors, including the type of work you do, form of employment, and the number of working hours. To determine your actual disposable income, you will have to deduct items such as social security contributions and income tax. That is why it is important to be familiar with Austria’s tax and social security system. Life events, such as pregnancy and parental leave, can reduce your income for a certain period of time. You might also (temporarily) lose your job for various reasons. In this case, it is important to know what unemployment and social security benefits you are entitled to in order to make up for the loss of income. For an overview, see Work and income.
On the spending side, it helps to understand how needs, desires and consumer habits influence our consumption and therefore our spending. If you are aware of these things and follow a few tips when planning your expenses, you can reduce your spending so that you have more money left at the end of the month. For information and tips on managing your expenses, see Spending and consumption.
