5 TIPS FOR BETTER MONEY MANAGEMENT
Most people assume that you need to be earning a substantial amount of money in order for you to properly manage it. But this is far from the truth. Any amount of money deserves proper management. Else, no amount of money will ever serve its due purpose. Earning is one thing, proper management/planning is another.
If we do not take care of our financial health, we hurt our future and our goal towards financial freedom.
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These money management tips will help save your sanity by giving you total control over your expenditure.
I have been a victim of spending and spending till I am 100% broke by mid-month. I know a good majority of people are victims of this too. Shopping is especially tempting, eating out or getting a take-out meal from a restaurant once in a while doesn’t seem to have a big effect on our pockets (so we think). But sit down and do a cumulative total of how much the once-in-a-while take outs have cost you (say in a month or a year) and you will be in utter shock!
Make a list. Write down the items you need and those that you don’t. Focus on spending only on the items that you need. You will be amazed at how much you will be saving.
Many of us think, “I know what I need to buy for my house off head, so I’ll just buy”. Let me tell you the problem with this. Taking items from a list you have in mind does not give you a clear picture of the amount that each item will cost, and consequently the total price for all the items.
Creating a budget will help you keep track of your finances and spending each month. It will enable you to know what you’re spending on and how much more money you are left with each month that can be put into a savings plan.
If possible, avoid committing to new recurring monthly subscriptions or bills, take advantage of discounts and coupons and always go for cheaper alternatives.
After you have done all this: spent on only what needs to be spent on, and saved what is remaining, you can reward yourself with a fun activity (but remember not to overdo it).
Now that you have a budget that you are adhering to, you should have a few bucks that will remain for saving. Set up a standing order from your checking account to your savings account.
This way, you will establish healthy financial habits because you do not have to remember to save.
I know what you’re wondering. What is the difference between a budget and a financial plan?
A budget is essential for monitoring your monthly spending, while a financial plan is a long-term strategy for moving you towards financial freedom.
A budget maps out your plan and expenses for months or weeks, while a financial plan helps you set financial goals for the future. Examples of financial plans include buying a house, getting your children’s education funds, etc.
It is easier to purpose your money if you have enough. It can be hard to manage your finances if you live paycheck to paycheck. It might even be harder to get a remaining amount that you can put into a savings scheme.
If you’re merely surviving, it can be easy to fall prey to unhealthy financial habits such as using credit cards, or getting loans after loans. Getting on a budget or making a financial plan will not work if you do not find enough money to put into this course.
It is not easy to get a stable source of passive income, but wake up every day and try again. One day you will wake up and you will not need to search again.
Originally published at https://lifeallround.com on December 19, 2020.
