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Tips To Money Management
One of the most difficult parts of adulthood is figuring out how to properly manage your finances. There are so many bills to pay and so many things to buy, that it can feel incredibly overwhelming to get a handle on your financial situation. Luckily, there are plenty of very helpful tips to money management that you can use to get yourself on the right track.
No matter where you are with your financial situation, it’s never too late or too soon to start taking control of your finances. Here are some great money management tips for adults (don’t worry— these are also great money management tips for students, too!). After you finish reading this article you’ll be equipped with the information regarding why managing money is important and the first steps to money management.
Keep Track of What You Spend
One of the most important tips for money management is to track your spending. This may seem simple, but it’s crucial to developing good spending habits and a good awareness of how small purchases can quickly add up. For example, if you buy a cup of coffee and a breakfast sandwich on the way to work for $15 dollars every, that might seem like a small amount to pay each time, but it adds up to $75 per week. If you do that every day of the working week for 48 weeks (the average number of weeks that Americans work per year), it would cost you $3,600! We bet you can think of a better use for that money!
Don’t worry. These tips for financial management aren’t focused on depriving yourself of things you love, but they do place an emphasis on making smart decisions and being mindful of your spending.
Tracking your spending is super easy with the help of apps to help with money management. There are a lot of great options out there, and most of them are free!
Create (and Stick To) a Budget
It can really help to create a budget and take steps to stick to it. This step is connected to the first, because you can’t really stick to a budget unless you track your spending. These might seem kind of intimidating (or like a lot of work), but it’s actually very easy to do both. When it comes to budgeting you don’t have to get crazy, but you can start by setting loose guidelines. Outline what you plan to spend each month on necessities like food, rent, gas, utilities, etc, and then allocate some for “fun” spending, and a bit for savings. That brings us to our next tip for better money management…
It’s never too early to start saving, and the beautiful thing about saving money is that you can do it regardless of how much extra you have. Even if you just contribute 50 cents to your savings account (or, better yet, a Roth IRA), it really helps you build healthy spending habits. As a general rule of thumb, many financial experts recommend adding 20% of your income to a savings account every time you get a paycheck.
You can make your own rules, but if you can spare the 20% and can cut down on your spending, it can make a huge difference.
Limit Monthly Charges
Sometimes when you sign up for a monthly subscription service you only look at the price and don’t think about the big picture. If you only have one subscription service and it only costs $15 or so dollars, it isn’t a big deal. If you have a ton of $15 subscriptions, though, it can quickly add up.
Look closely at what you’re paying for subscriptions each month. Do you really use and need all of them? Ask yourself critical questions that can help you prioritize monthly spending. If you subscribe to multiple streaming services, consider which one you use most often. Maybe it’s time to cut back on the others for a while by using the Truebill app.
If You Use Credit Cards, Pay Your Bills on Time
When it comes to credit, paying bills on time is king. Doing so can save you tons of money on interest that adds up when you pay late. If possible, try not to spend over 30% of your credit limit per month as well. Both of these steps can help you save money and can also help you improve your credit score.
Look Into Investing
Another great strategy for money management is to start investing some of your money. There are a lot of ways you can invest, including real estate, stocks, a Roth IRA account, and more. Some options make more sense if you’re looking to save in a long-term sense. Look into the various options you have available to you to figure out which makes the most sense for your situation.
Consider Paying for Big Purchases in Cash
Rather than putting large purchases on your credit card, try saving up cash to pay for big things you want. This can help control your credit spending and can allow you to understand the financial significance of making big purchases.
There are so many important steps you can take to get your finances on the right track. All of the steps listed above are great places to start when it comes to financial planning, but the most important thing to remember is that you’ve taken the first step just by visiting this page! Having an awareness that something needs to change and that you have the power to make a difference in your financial situation is a big deal. Once you take the first few steps to changing your financial future you’re already well on your way to better money management and healthy spending habits. It might seem overwhelming at first, but small steps lead to big change. As long as you stay committed and consistent, you can change your financial future.