Easy Steps to Better Money Management
Being good at managing your money is more than just knowing that you have enough money to cover your costs. You can also manage money well without being brilliant with maths. With a calculator, or some basic addition and subtraction skills, you can be good to go. It is something that is really important to consider, because life is much easier when you can manage your money well, and you have some good skills with your finances. The money that you spend and how you spend it, can impact things like your credit score, and be the thing that determines how much debt you end up with.
If you are someone that struggles with finances, and seems to always be in debt or living paycheck to paycheck, even when you know you have enough money coming in, then you need some help with your finances, and our habits around spending. For example, if you are facing a decision around spending with a large purchase, you can’t just presume that you can just afford it. You have to plan ahead for it, make sure that the money is there for it, and that the allocated funds aren’t needed for something else.
All of these things mean that you need to have a budget, to monitor what is coming in, and what is going out. Then you’ll be able to figure out what is leftover at the end of the day, and what can be saved, used towards clearing debt, or used for those extra purchases. You always have to consider your bills and clearing any debts, before you think about anything new, which is why managing your money, and doing it well, is so important.
One of the first things that you need to think about is having a budget. A lot of people don’t use a budget because it does take time to plan and go through. You have to sit down with your bank statements and a spreadsheet, and go through your incoming money, and any of the necessary outgoings (like rent or mortgage and so on). If you are bad with your money, then you won’t have a clue what is going on, what money is going where, and it can easily lead to overspending, and even missing certain bill payments. All you need to do is to make your budget, specific to you, and it can avoid all of that. It has to be worth doing, right?
Now that you have made your budget, it would be a wasted way to spend time if you then don’t go on to use the budget. It shouldn’t just sit in your drawer collecting dust; you need to refer back to it, and remember what you’ve put in place, so that you do stay on track with all of your financial decisions. Things can change, such as a promotion or losing a job, so you should always be flexible with your budget, and amend it when you need to.
Checking best prices
One thing that you should be doing if you want to manage your money well, is looking at what you have to spend money on, and then looking for better ways to do that (and by better, read cheaper). You have to spend money on home insurance or car insurance, right? But how can you spend less with this? Altering your premium can help you to get a better deal, as well as switching providers, perhaps. One of the things that you may spend a lot of money on each month is your car, if you lease it or you pay for it on a payment plan. But why not shop around to make sure that you are getting the best deal, with one of the best novated lease companies, for instance? If you want a cost-effective way of leasing your car, then you need to shop around to check that you are with the people who can offer the cheapest deal. This can go for anything that is a ‘must spend.’ So take some time to shop around and it will be worth it.
Contribute to Savings Regularly
If you want to take control of your finances, then having a savings account where you regularly deposit is going to be one of the ways that you can do just that. It gets you into the habit of saving, and gets you focused on moving money somewhere else, once it is in your bank account. You can even make it automatic, by setting up an automatic transfer, so that you don’t even have to think about it. That way, the thought is taken away, and you won’t ever forget to do it. It is a really healthy financial habit.
Save Up for Big Purchases
We all like to get new things, and in some instances, need to get new things when others break or stop working. But if you want to take control of your finances and manage your money better, you need to think about delaying gratification that comes from purchases. It will help you to stay in control, and keep within your budget. When you put off things like large purchases, rather than using a credit card or making sacrifices with smaller purchases, it will give you time to properly evaluate what you are looking for, and give yourself time to even think about if the purchase is something that you even want or need. You can compare prices and shop around more, when you give yourself a little time. Plus, it will be much better for your financial health than just putting something on a credit card.
To start with, you might not be used to all of this planning, budgeting, and keeping track of your spending. But the more you do it, the easier it will be, and you will quickly start to see the benefit of it all. The more that you make these financial habits part of your life each day, the better your finances will be, and the easier it will be.