{"id":140,"date":"2021-01-26T06:48:19","date_gmt":"2021-01-26T11:48:19","guid":{"rendered":"https:\/\/walletorama.com\/?p=140"},"modified":"2021-02-08T23:35:00","modified_gmt":"2021-02-09T04:35:00","slug":"money-management-tips-you-can-start-today","status":"publish","type":"post","link":"https:\/\/walletorama.com\/money-management-tips-you-can-start-today\/","title":{"rendered":"10 Money Management Tips You Can Start Today"},"content":{"rendered":"\n
Many people struggle financially, not because they are not making enough money, but because they don’t know how to manage money, which is why everyone should know two or more money management tips.<\/p>\n\n\n\n
Money management tips to know include creating a budget to track your spending, cutting down your debts, having investments, having a passive income, and lots more.<\/p>\n\n\n\n
Are you interested in learning more money management tips to help your finances? Keep reading with an open mind:<\/p>\n\n\n\n
Best Money Management Tips<\/h2>\n\n\n\n
Money management involves confirmation, not assumption. What does this mean? If you are going to spend on something, you need to confirm you can afford it rather than only assuming.<\/p>\n\n\n\n
Confirmation includes checking your balance in your bank accounts compared to your budget to see if you can afford the purchase. After comparison, consider other bills and expenses that are likely to come up before your next paycheck. You don’t want to be stranded.<\/p>\n\n\n\n
Take a look at more money management tips to know:<\/p>\n\n\n\n
1. Have a goal<\/h2>\n\n\n\nWriting money management goals<\/figcaption><\/figure>\n\n\n\n
It could be daily, weekly, monthly, or yearly goals. Setting a goal disciplines your spending habit.<\/p>\n\n\n\n
You are not there thinking of getting a new iPhone because it got released last week. That’s not part of your financial goal.<\/p>\n\n\n\n
You can set a goal towards a purchase or life savings. It removes impulsive buying from your path, which is one of the primary ways people squander their money and run into debt.<\/p>\n\n\n\n
When you have a goal for how you spend and save, you’ll have a different approach to making and spending money.<\/p>\n\n\n\n
2. Create a Budget<\/h2>\n\n\n\nBudget planning to manage money<\/figcaption><\/figure>\n\n\n\n
Having a budget is a money management tip you should adopt because prevents overspending. When you have and stick to a budget, you are less likely to spend all your money and rack up debt.<\/p>\n\n\n\n
To create a budget, you can try using any of the three budgeting systems available, which are the:<\/p>\n\n\n\n
50\/50\/20 budget.<\/li>
Envelope budget<\/li>
Zero budget<\/li><\/ul>\n\n\n\n
How does the budgeting systems work? Let’s look at each of them:<\/p>\n\n\n\n
50\/30\/20 approach<\/h4>\n\n\n\n
For this approach, you’ll take out 50% from your paycheck to take care of necessary expenses like stocking the house with food, utilities, and so on. The 30% is for leisure activities like seeing a movie, eating out, etc. The 20% should be directed to savings and paying debts.<\/p>\n\n\n\n
Envelope budget<\/h4>\n\n\n\n
This system involves creating spending categories such as food, clothing, housing, utilities, transportation, and leisure.<\/p>\n\n\n\n
The next step is getting an envelope and labeling it with each category. Put a limited amount of money in each envelope.<\/p>\n\n\n\n
You are going to use this money for some time. Depending on when you’ll get your next paycheck, it could be weekly or monthly.<\/p>\n\n\n\n
Suppose you spend all your money before your next paycheck; you’ll have to stop spending on the category or get money from a less critical category to fund the vital one. You cannot touch your savings.<\/p>\n\n\n\n
But if you don’t spend all the money, you can reassign it to next week’s budget, save it, or use it to pay up your debts.<\/p>\n\n\n\n
Zero budget<\/h4>\n\n\n\n
The zero budget allows spending on mandatory needs, no leisure or miscellaneous expenses. After assigning money to the basic expenses, the remaining goes to your savings or debt.<\/p>\n\n\n\n
It would help if you were strict for this to fly. Probably you can start from the first two budgets before considering this one.<\/p>\n\n\n\n
But once you can grasp it, you’ll see your savings account growing every day, giving you more financial security.<\/p>\n\n\n\n
3. Cut down debt<\/h2>\n\n\n\nCut down debts<\/figcaption><\/figure>\n\n\n\n
To get financially stable and better positioned to manage your money, you need to cut down your debts. When you have a loan or credit card debt you are yet to clear; you’ll keep paying interest on it. <\/p>\n\n\n\n
Concentrating your resources to reduce your debts will also reduce the interest you’ll have to pay. You can now save more money than continuously splitting it between spending, saving, and debts.<\/p>\n\n\n\n
Start with small debts<\/h4>\n\n\n\n
If you have too much debt you need to clear, it will be wise to start from the small debts first since they’ll be easy to clear. Then you can gradually move on to the bigger ones. <\/p>\n\n\n\n
If you decide to start with the more significant debts, you might end up borrowing before the next paycheck. Don’t be in a hurry to clear your debts. Take baby steps.<\/p>\n\n\n\n
4. Cap your credit spending<\/h2>\n\n\n\nCredit card <\/figcaption><\/figure>\n\n\n\n
This money management tip involves ensuring your credit spending is not more than 30 to 40% of your overall credit limit. Following this method will keep your debt to credit ratio low and save you from going deep into debt.<\/p>\n\n\n\n
Moreover, it will put you in good standing with credit reporting agencies. Because when they are tabulating your score, they check your debt to credit ratio. They use it as a means of determining if you can manage credit responsibly.<\/p>\n\n\n\n
5. Stop using your credit card<\/h2>\n\n\n\nKeep credit card away<\/figcaption><\/figure>\n\n\n\n
If you want to cut down your debt, you need to keep your credit card far away from you and use cash. <\/p>\n\n\n\n
Using cash may reduce your ability to save since you’ll need it for making purchases. But it’s far better than accumulating debt. And if you are strict, you’ll still be able to save even the tiniest amount. <\/p>\n\n\n\n
Follow this approach if you find it difficult to minimize your credit spending.<\/p>\n\n\n\n
6. Save on everyday items<\/h2>\n\n\n\n Basic Items<\/figcaption><\/figure>\n\n\n\n
What’s the point of using expensive toilet paper when it does the same function as a cheap one? You can’t be out there feeling like a bourgeoise when you are trying to save some money. Money management is when you can trim your spending on unnecessary things. <\/p>\n\n\n\n
Everyday items are necessary, but what’s superfluous is spending money on expensive brands when you can solve your needs with cheaper brands. <\/p>\n\n\n\n
Try saving on items like toilet papers, detergent, and even ingredients, and in the long run, you’ll see how much you’ve been able to keep in general.<\/p>\n\n\n\n
7. Track your spending<\/h2>\n\n\n\nTracking your spending<\/figcaption><\/figure>\n\n\n\n
Tracking your spending helps you reveal your spending habits and allows you to make adjustments. Thanks to technology, you have digital tools like online banking to help you with tracking. <\/p>\n\n\n\n
You can track your spending by keeping the receipts for all your cash purchases and carefully checking the items you purchased monthly through your credit card statement.<\/p>\n\n\n\n
There are lots of investments you can do that will help save your money and increase it. Investments don’t have to be heavy-duty things like real estate. You can go for other smaller forms of investment like money market mutual funds. <\/p>\n\n\n\n
Investments will give you better returns than just keeping your money in a savings account.<\/p>\n\n\n\n
If you don’t know what to invest in, you can ask banking officials or financial advisors for advice. They have a range of investment products they can offer to you. And even guide you on how to proceed.<\/p>\n\n\n\n
9. Have a passive income source<\/h2>\n\n\n\nPassive Income<\/figcaption><\/figure>\n\n\n\n
Aside from investments, you can also get a passive income to augment your paycheck. If you have the financial capability and can manage your time, then think about rental properties. You can earn passive income from the rents.<\/p>\n\n\n\n
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