8 Expert Tips for Great Money Management

Money Management

Written by Jessica Mathews

Money management is one of those topics that many people don’t like to discuss. Do you get all worked up whenever you are told that you need to manage your money wisely or else you will end up broke?

Well, don’t worry you are not alone. Most people still don’t know the basics of good money management and an even larger percentage don’t like talking about money management issues especially when they are doing it the wrong way. It is important to master these skills at a younger age so that when you become older you enjoy a financially fit retirement. If you want to improve your money management skills, here are eight expert tips.

Money Management plan

  1. Set valid goals

Many people become impulse buyers because they have not set any valid goals for their money. Some buy expensive gadgets whenever they get their pay checks only to grow bored with them and lock them away. Having no money goals leads to frustration after realization that what you spent your money on something you can do without when you could have bought or paid for something more important. Setting goals helps you set your priorities straight by showing you what is important and what is not. Split your goals into long-term, medium-term and short-term for better self-assessment.

  1. Keep an eye on your spending

Like a sinking boat, you need to find where the leak is and seal it or risk drowning in bankruptcy. At the end of the month, go through past receipts and count your spending to the last cent. Account for everything you used your money on however cheap. Make sure your check book is in balance whenever you make a withdrawal or a deposit. Transactions made through credit and debit cards should similarly be accounted for.

Money Management -Saving

  1. Learn to Save

Saving is simply keeping a percentage of your earnings instead of spending it. This is a well-known skill long forgotten through ignorance. There are many banking systems that offer this service. You can as well do it yourself if the sum of money involved is not too much to handle. Saving should be done on money that you initially had plans to use in buying things you can live without.

  1. Change your habits

Changing your habits is about learning to cut back, not cut out. Don’t change your lifestyle overnight but gradually remove your money spending habits. Learn to spend your money on necessities only and reduce or leave out the luxuries or impulse shopping. Cutting out generally leads to frustration and in the end usually put people back on track to impulse buying because it seems to extreme and painful. However, cutting back gives your body and mind time to adjust to the new changes and over time great new spending habits can be formed to improve your money management.

Money Management Zero Stress

  1. Borrow Wisely

Loans give you a chance to fund important purchases when you don’t have the cash saved. It is wise to only borrow what you know you will have in the future to pay the loan back, which means you are only bringing forward your important purchase knowing that you will have the cash available within a certain time frame. Making irrational decisions when borrowing money can land you with heavy debts. Before taking a loan, consider whether it is a long-term credit or a short-term credit. Furthermore, borrow money only when you really need the money to avoid bad debts.

  1. Pay all your bills

Most people let their bills pile up and later they become exasperated when they become a lot to pay. Nowadays, payment of bills has been simplified through mobile banking so you don’t have any excuse for laziness when it comes to paying your bills. You should train yourself to pay your bills a few days prior the deadline. Paying your bills before the due date will reduce the pressure and temptation of spending that money on goods and services bought on impulse.

money management - invest

  1. Invest your savings

Instead of only keeping your money in savings, you can choose to invest it in a business or in the stock market. However, be careful not to put your money into empty dreams such as gambling. Investing will ensure that your money will multiply someday in the future. Make sure you do plenty of research before you invest and if in doubt take advise from an expert.

  1. Pay off your debts

It is wise to start paying off debts with higher interest rates first and then the ones with low interest rates later. Having accumulating debts is a poor money management behavior. Follow all terms and conditions of money given to you by lenders to avoid any extra charges.

After reading these eight expert tips you may discover that there are no secrets to good money management and you probably knew about most of them. The key for most of us is about having the self-discipline when dealing with money. Apply self-discipline and new habits around money management and after a while you will see your money grow.

Sources:

http://www.bankrate.com/finance/smart-spending/money-management-101-1.aspx

https://www.moneyadviceservice.org.uk/en/articles/beginners-guide-to-managing-your-money

https://www.forbes.com/sites/laurashin/2014/05/08/the-only-3-money-principles-you-need-to-know/2/#31fbeb20ab3b

 

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