Making the right financial decisions can make you feel tremendous pressure. While it would be impossible to cover every money management point, in this article we will touch on 8 ways to help you better manage money that are both simple and easy to implement.
1. Debit Card for Easy Tracking
Tracking your spending is much easier when you use the same source for almost all of your purchases. At times, a credit card may be necessary. Just make sure that you pay off your entire balance every single month.
2. Look at the Big Picture
Make sure you know your net worth at all times. By taking the time to do this regularly, you are doing one of the most important money management steps. Your net worth can be calculated by taking account of everything you own, and subtracting any debts. This figure is more important than your monthly income. Use excel or another spreadsheet to figure this out.
A budget, adhered to monthly, is an important tool in creating a positive net worth. If you are spending more than you are making, your net worth goes down. If you are saving more than your spending, your net worth will go up.
3. Keep Track and Review Expenses
Everyone has expenses that are required to live. These include rent or mortgage, car payments, insurances, gas and electric. Look closely at these expenses and see if you can either eliminate them altogether or negotiate them down. While this may only be applicable to certain categories, it is definitely worth the time. For instance, shopping for a new car insurance carrier every few years can really pay off. Visit familymoney.co.uk for financial help.
Look at your discretionary expenses next. Figure out how much you are spending on eating out, shopping, coffee run, and other splurges. Look at ways you can cut spending and figure out a budget that is both realistic and attainable.
4. Invest Now
Even setting aside a few dollars a month can help your savings grow exponentially. The practice also develops an important habit that will help you for the rest of your life.
5. Periodic Expenses Happen, Be Prepared
Big expenses never seem convenient. Car repairs or large household repairs can send families into a tailspin. Make sure you are prepared for moments like these. Stow away some money in a place that gives you a good interest rate. It is a good idea to speak with a financial planner to figure out what services can help you gain wealth faster.
6. Keep an Emergency Fund
In case something happens, experts recommend having at least a few months of living expenses available for emergencies. Whether or not this is a 12 month, 6 months, or even 1 months’ worth of expenses, it is important to have something. It is never a good feeling having to live from paycheck to paycheck. Rather, it is quite freeing knowing that even if the worst happens, you and your household will be fine.
Whether or not your make a good income from your job, it is always a good idea to create additional income from another source. There are many ways to create a second income. Sell valuables on ebay, look for freelance opportunities, or take another job on the weekends.
8. Take Advantage of Free Money
Look for ways to save money. There are thousands of opportunities such as money to open a checking account at a certain bank. Always use caution and make sure you read and understand the fine print. Jump on good offers, but only if you actually have a need for them.