Wouldn’t life be a lot easier if there was some secret recipe to managing your finances? Learning to manage your money might seem rather tricky, but there are simple things that you can do that will improve your financial situation.
If you’re living paycheck to paycheck and struggling with money management, there’s still hope for you. Managing your money takes some time to understand and needs commitment & awareness of your financial situation. Here are some tips to enhance your financial habits.
1- Create a Budget, and Stick to it!
Many people might find it a bit boring and consequently, avoid creating a budget. Indeed, it is hard to both create and stick to a budget at first; nevertheless, it’s the best way to pay off current debt and start saving for future expenses. Eventually, allowing you to have financial stability and ultimate peace of mind. The next tips will help you in setting your monthly budget.
2- Understand Your Expenses vs Income
We know how much we make each month, but the challenge is determining the total amount of expenses we generate in order to maintain a financial equilibrium.
You will need to keep track of all your expenses, both paid in cash and credit. Start by keeping all your receipts (utility bills, groceries, take-out, etc.) and consolidate them in an excel sheet or using a budgeting app on your smart phone. The main goal is to know all your fixed and variable expenses, to get a total amount of your spending. This way you can always see the full picture of your financials and even compare & analyze your spending habits over time.
3- Cut Unnecessary Expenses
Whether you like to buy a cup of coffee on your way to work each morning, or pay for the gym membership that you never end up going to, sum up all these expenses and you’ll realize that a huge sum of your income goes to waste.
The key to managing your finances is to always take every penny into account, while also taking the time to consider slashing expenses whenever you see an opportunity.
4- Limit Unbudgeted Spending
Sometimes, we find a great offer/discount on an item and we feel tempted not waste that opportunity! It’s okay to pamper yourself and buy something that wasn’t budgeted or planned-for every once in a while. Nevertheless, it is very critical to set a limit for unplanned purchases each month. Before you make any purchases, make sure it won’t take away from anything else you have planned.
5- Contribute to Your Savings Regularly
Make a habit out of depositing money in your savings account each month. You can even set up a monthly automatic transfer from your current account to your savings account. This way you can receive interest on your access money and have an emergency fund.
Being good with money takes some practice and commitment. We encourage you to make a habit out of these tips. Stay tuned to our blog and we’ll definitely be sharing more tips soon!
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