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Being good with money is more than just making ends meet. Learning or having the ability to manage your money the right way doesn’t always need great math skills, all it needs is to know a few basic addition and subtraction. 

Ask any financial adviser what schools are laking?. most of them would say Money Management courses. And the reason behind this is many Americans (or other people in other countries) lake basic skills that enable them to pay off loans quickly and fully, track their everyday spendings, and save some money for retirement.

However, the good news is, I gathered some of the best personal finance tips that will help you pay your debts, and slash spendings so you have more ways to put your cash to good use.

How To Manage Money Better

Learning how to manage finances takes time and effort, and it is a process, but the good news is if you are searching and looking for ways to save and manage your money you’ve already started the process, all you need to do is continue.

Here are 9 simple money management tips that will help you feel more financially secure.

Create A Budget

First things first, you have to create a budget it is extremely important. Creating a budget and sticking to it might seem a little tough to achieve at first, because most people won’t go through what they think will be a boring process of listing out expenses and making sure everything lines up.

If you are really bad with money and you spend most of your salary in the first week, you don’t have room for excuses with budgeting. If All it takes to get your spends on track is two or three hours working a budget each month, why wouldn’t you do it right!!.

For those who really want to manage their money but hate budgeting, you can simply focus on optimizing what I called the “three biggest expenses” which are housing, transportation, and food.

I said that because the average American Family spends around 70% of their incomes on those three expenses. The small purchases such as Netflix or other every day spends can add up, but when controlling and managing the three categories above, you’ll be able to save the most amount of money where you spend the most money.

Comprehend Your Expenses

The second tip that will help you manage your money the right way is by understanding your expenses. Ask anyone off the top of their head to tell you how much they spend each month and they might not be able to do so, you know why. Because most people actually don’t know what is the exact amount of expenses they generate in any given month, and this is a big problem.

To understand your expenses there is an easy way to do that, you need to keep track of all your expenses. Write down all of your monthly expenses, start with your fixed ones like rent, mortgage, insurance, student loan payment, cell phone, and internet bill, etc. These are the easiest ones to start with because they are almost the same amount each month. 

What you want to do next is write down your variable expenses that are changing from month to month like groceries, donations, gas, etc. Also, don’t forget to track your expenses paid by cash as well.

The idea here is when you do all of this and list it you’ll get the total amount, this way you’ll be able to see the whole picture and to know how much you spend and how to manage your expenses in the future.

Try To Get Out Of Debt

Debt, the word that scares everybody. No one likes debt, and most if I didn’t say all people that need help managing money actually need help getting out of debt. but don’t worry, there are a lot of people get out of debt every day and you can too.

Managing your debt is just a numbers game. Always make sure to control your debt, and don’t let it control you. Pay down your debt with the highest interest rate first like credit card debts, student loans, privet loans, mortgages.

Again, it’s all about taking the proper steps to control your money. There are many strategies for paying down your debt, like paying off your biggest debts first, then the small ones, or paying off your small debts first then the biggest ones. But we highly recommend that you pay down your highest interest rate debt first, because this way you’ll not only going to get out of debt but also save the most money.

Need vs Want’s

This is really important. You have to know the difference between what you need and what you want. The things you need are the things that are necessary for your life or in your everyday use, while the things you want are just some stuff that doesn’t play that much of a roll in your life. You really need to start separating between what you need and what you want. 

To explain this more. Starbucks for example, if you are a fan of Starbucks and buying a Venti Caffe Latter every day, this will coast you $4, which is around $1,400 A YEAR assuming you drink one cup a day. you don’t need coffee to live, you just want it to start your morning, I’m not telling you don’t drink coffee but you can make it at home and save some of that money right.

Another example, Gym Membership. Most people are going to the gym just to lose weight, and you can do so just by running on parks, beaches, etc, and you don’t need a gym membership for it. So gym is one of those things that you want and doesn’t Need.

Remember I’m not forcing you to Quite drinking Coffe or to stop being fit, but the idea here is to learn how to manage finances better by separating between things that you need and things that you want.

Establish An Emergency Fund

Emergency Fund is an important part of a healthy personal finance plan. Setting aside some cash for unexpected events such as Los job, car breaking down or other things that life will throw at you at any time. Like McGarth Says “everyone needs an emergency pot for three to six months of expenses”.

A great way to create this fund is to include savings in your budget. The amount you save is depending on how much extra money you have available, but putting aways aside at least 10% of your income into emergency savings each month is really great and will help you in case something unexpected happens.

Read More: to know more tips and tricks about how to save money, check out our article about How To Save Money 14 Money-Saving Tips And Tricks.

Make Savings Automatic

For most people, saving money is hard, and that’s because people usually try to put some savings out of what they have left after paying bills and all other big expenses.

A healthy way to do it is to pay yourself first. By depositing money into your savings account automatically each month. By doing this method you’ll build healthy financial habits. You can set it up, and decide how much money you want to start depositing from your checking account to your savings account or decide on a percentage like 10% or 15% of your income to your savings account.

Start Saving For Retirement

I know it’s far off, but at some point, you may want to retire, and you don’t want to spend most of your time surrounded by four walls and nothing to do. No, you want to retire and go explore the world, and you won’t be able to that without a retirement fund.

Social security benefits only replace approximately 40% of your income and many employs no longer offer pensions. So you need to start saving 15% or 10% of your salary for retirement.

For example, you are 22 years old and don’t have anything saved up, but you just got offered a job paying you $40,000 a year. If you only save 10%

Of that amount, it will leave you with $2.5 million saved up. With this money, you can travel not only to the U.S. but you will travel the world, or buy your dream house and live the best life because you did that thing that everyone else is so lazy to do.

Negotiation

Not all services have costs that are set in stone. There are a lot of bills with rates that are actually negotiable, thanks to hidden discounts and barely advertised promo rates. If you need to decrease your monthly expenses, Truebill can handle the negotiations for you.

Plus you simply pay for the service is they actually secure you a discount, with the charge being set at 40 percent of what you save, so that you always come out ahead.

Find What Works And Work With It

One of the greatest maxims that applies to money management is “if it’s not broke, don’t fix it”. That means once you find a system that works, all you have to do is keep working with it (period). 

Don’t distract by new apps or new conflicting finance advice. Just try a couple of money management strategies, find the one that works for you, and keep doing it.

If you found this post useful, and you want to check it later, you might want to save THIS PIN to your Pinterest Money Management board.

Money Management Tips _ 9 Simple Personal Finance Tips (1)

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