Money management has become an issue that not everyone knows how to deal with. Some people are good at it, while others are completely hopeless. The good things is that money management, just like most things can be taught, and it can be learnt. All you need is to be eager to learn and put the tips into every day practice so that you will be able to manage your money all the time.
Start saving from this moment on. Sure it’s easy to say but much harder to do when you have to feed a family, pay off debt and manage those unexpected costs. Savings, that’s for people who earn a lot. Well, no actually saving is for everyone. If you can’t save 10% of your monthly income, save 5%. If five per cent is too much, start with 1% and build on that. Zero plus zero will always be zero. One plus one plus one can add up to a nice figure with time and patience. Open a second account or get a money jar and start depositing a bit of cash into it every week or month. Don’t touch it, within a year you’ll have a nice sum that can be used for emergencies, retirement or a holiday.
Credit cards are a bad idea and shouldn’t be used to buy items which you don’t need right now. They are only good when you can earn points and pay back the funds before you start getting charged interest on the purchases. If you have a credit card, pay it off and get rid of it or keep a small amount for emergencies. Real emergencies that is, not going out for a three course meal with the family. That’s a want not a necessity.
Pay your bills on time. This will help you build a good credit rating and when you apply for a loan or mortgage it will be much easier to get one. Don’t think your electricity or Internet bill doesn’t count. All of it is important so make sure that you keep track of it.
In order to keep track of your spending and income, you should create a budget. The budget is really one of the first steps of basic money management. It’s also one that not many people like. Creating a budget is simple, you simply write down your income minus all your fixed and variable expenses. What you have left over can be saved or used to reduce any debt you may have. The hard part of budgeting is actually sticking to what you’ve created.
Money management is easy. Get a budget, start saving, get rid of debt, avoid using credit cards and pay your bills on time. Once you’ve got that down pat you can start making your money work for you through different investments.