10 Simple Ways to Manage Your Money Better￼
Managing your money is not just about meeting necessary needs. And you don’t need to be a mathematical genius—just know how to add and subtract.
Good financial skills make life easier. They impact the level of debt you incur as well as your credit score. If you live paycheck-to-paycheck yet you make a lot of money, then you may have poor money management skills.
Just because you have funds doesn’t mean you can afford to make a purchase decision, especially a large one. Before you buy something, make sure you can afford it and that the money wasn’t meant for anything else.
Money Management Tips
Create a Budget
For many people, budgeting is a boring process that involves listing expenses and math. But if you have already established that you need help with money management, you can’t afford to make excuses. Taking a few hours every month to create a budget will help you get your finances in order. So why would you want to avoid it? Focus less on the boring process and more on how it will add value to your life.
Use the Budget
What good will your budget do if you never look at it? Use it throughout the month and let it guide you while making spending decisions. Keep updating it when you pay bills. Make sure you know, at any time, how much money you can spend.
Limit Unbudgeted Spending
Your net income is critical to your budget. This is the amount you have left after paying your expenses. You can use this money for entertainment or fun. However, create a limit—especially if it is for the whole month.
Monitor Your Spending
Those purchases you consider small can add up very quickly and it is easy to overspend. Monitor your spending and see where you are overspending unknowingly. Save receipts and keep a spending journal.
Avoid New Monthly Bills
Even though your credit and income qualify for a loan, you don’t have to take it. Remember that you have to make the payments on time. Assess your finances and confirm that you can afford an extra monthly payment.
Pay the Best Prices
If you can, try comparison shopping and pay the lowest prices for both services and products. Find cheaper alternatives, coupons and discounts.
Save Up for Any Big Purchase
Delaying gratification goes a long way in money management. Instead of using a credit card or sacrificing essential purchases, put off a large purchase and save up for it. You will have enough time to compare different prices and determine whether it is really necessary.
Limit Credit Card Purchases
If you are a spender, a credit card is your worst enemy. Don’t run to use your credit card anytime you are out of cash.
Every month, set aside some money and deposit it into a savings account. Even better, make it automatic.
It Takes Practice
At first, all these habits will not come to you easily. Nonetheless, keep pushing until they become a part of your life.