7 Tips To Manage Your Money Right!
Money can be hard to manage. How do we make money work for us instead of against us? How do we make sure we have enough for everything we need, while also being able to have some of the things we want? It can be tough to learn on the fly when mistakes can literally cost you hard earned cash. That’s why we’ve put together this list of 7 tips to help manage your money!
How To Get Started
Just as it’s important to learn how to manage your money, it’s also important to learn why. Even if you currently have enough cash for rent, food and fun,it’s always best to look forward. Not managing your cash flow properly could lead to serious problems down the road. If you want to save up for a car, a trip or maybe even a house, you’ll need to know the exact ins and outs of your money. The more you can prepare in advance, the better placed you’ll be to take full advantage of any opportunity.
You’ll also want to ensure you understand how different financial institutions and bank accounts work so that you know you’re getting the best bang for your buck. If you don’t learn how to make your money work for you, you could end up drastically overspending on things that don’t matter to you, not able to pay vitally important bills, be knee-deep in debt or have zero savings in an emergency.
So what are the most important steps to learning how to manage money? Here’s 7 vital money managing tips to help get you started
1) Make A Budget
This is the single most important thing you can do if you want to manage your money. To make a budget, write down your income per week, then write down all necessary expenses i.e., rent, food, electricity and other vital things. The money you have left after your expenses is what you have left to work with for recreational spending, savings and other financial goals. With all this information laid out in front of you, you’ll have a clear picture of exactly where your money is going and where you would like it to go.
2) Consolidate Your Debt
Debt is one of the biggest barriers to financial stability. If you want to take control of your money, you need to take a close look at any debt you have, ensure you’re getting the lowest interest rate possible and work to pay it back as soon as possible. Since roughly 80% of Americans have debt, you’re definitely not alone in this. There are plenty of helpful services out there, such as services that combine all your debt into a single bill, that will make paying debt back easier and more convenient.
3) Remove Unnecessary Expenses
Now you’ve got a clear picture of where your money goes, the next step is to start reigning it in. Small expenses can seem insignificant when viewed on a daily basis, but when you look at the bigger picture, they start to add up. For example, one $4 coffee a day adds up to $1400 spent in a year. If you’re regularly spending money on something that doesn’t matter that much to you, cut that expense. That way, the money will be freed up for something you’re truly passionate about.
4) Create An Emergency Fund
If you don’t know what an emergency fund is, it’s essentially a pool of savings set aside for when life starts to take an impact on your money. Everything from loss of a job to your car breaking down to a sudden injury can have serious impacts on your finances. With an emergency fund, you’ll have a cushion to ease that impact, and gain more peace of mind. Experts recommend saving enough to live on for six months and letting it earn interest without touching it.
5) Understand Your Credit Report
Your credit report might seem intimidating, but it’s one of the most important documents out there for understanding the state of your finances. This is a number that serves as a sort of grade for financial institutions to look at in order to understand how effective you are at handling money. As this can affect the loans you can take out, as well as other life-changing things, the credit report is vitally important. Ensure that all your information is on there, and that it’s accurate and up-to-date.
6) Use Personal Finance Apps
If you feel like your personal finances are too complex for you to understand, you might need a little extra help. Personal finance apps are ideal for this. They can help you do the computational work needed to make a budget, lay out information simply and clearly, and more. Quicken from Windows and the MoneyStrands app are just two examples of great tools like this. You’ll be able to see everything you need to know, right in front of you.
7) Follow Money Management Resources
If you want to truly get a grasp on financial knowledge, it makes sense to listen to the experts. If you look for it, there’s tons of accessible financial advice out there, created and put together by qualified financial professionals. Look for money management resources that apply to the level of knowledge that you have, and that have advice that works best for your situation. Having lots of different voices available will help you to develop a broader well of knowledge.
Of course, we aren’t financial experts. This is only the basics of what you need to know about getting your cash under control. Read lots of sources and do your own research on the topic. But this is a great starting point for you to understand what to read about. You’ll be able to manage your money in no time.
- “10 Essential Steps To Manage Your Money The Right Way”, MoneyStrands, accessed 24th May 2021, https://moneystrands.com/10-steps-manage-money-right-way/#:~:text=10%20Essential%20Steps%20To%20Manage%20Your%20Money%20The,5.%20Slash%20or%20remove%20unnecessary%20expenses.%20More%20items.
- “Beginner’s guide to managing your money”, MoneyHelper, accessed 24th May 2021, https://www.moneyadviceservice.org.uk/en/articles/beginners-guide-to-managing-your-money.
- “10 Simple Ways to Manage Your Money Better”, The Balance, accessed 24th May 2021, https://www.thebalance.com/ways-to-be-better-with-money-960664.
- “How to Start Managing Your Money, For Those Who Never Learned Growing Up”, Lifehacker, accessed 24th May 2021, https://lifehacker.com/how-to-manage-your-money-for-those-who-never-learned-g-1703892260.