HOW TO MANAGE YOUR MONEY WISELY?

HOW TO MANAGE YOUR MONEY WISELY?
Advertisement

How To Manage Your Money Wisely?

Aristotle said that among the pillars of happiness are health and wealth. For everyone, our health surely comes first. But money usually always comes second.

It isn’t that we are in love with the green paper, or even that we’re all rampant materialists who are addicted to spending. It’s more that we like what money represents – confidence, security, stability. It’s how money makes us feel that’s so important here.

Money is a huge part of anyone’s life. While it doesn’t buy us happiness, it at least provides us with a stable ground – a platform from which we can more confidently take care of the rest of our life.

Money worries are just awful. If we can’t pay a bill on time, the stress can get unbearable. And because schools don’t teach us the valuable life skill that managing our money wisely is, there are a great many of us who find it hard to build savings.

If you’re sick and tired of running out of money too easily and too quickly, let’s take a look at how to better manage your cash.

Set A Budget

Managing your finances more wisely requires a bit of forward planning, and you may have to get your calculator out.

Advertisement

Making a budget isn’t easy. One of the reasons people don’t make one is because they’re unsure how to make one, and also rather scared that they’re not going to like what gets written down.

For example, “no shoes” this month sounds just awful!

But once you start seeing a budget as something that can actually free up some money, you will be more inclined to making one.

To make a budget, you have to determine both your income and your expenses. How much money will you have each month, and how much do you usually spend on things such as your rent, bills, food and entertainment?

Then, write down your needs, followed by your wants.

If you have ran over budget, you will need to adjust until your outgoings don’t exceed your incomings.

Always Save First, And Then Spend

Advertisement

The great American investor Warren Buffet has some rather salient advice to first-time investors: “Save first and then spend.”

Although you’re not an investor, the advice still applies to you.

Too many of us get caught up in the trap of spending most of our money first, before putting aside whatever is left (usually a bit of loose change). As such, we never have any savings to fall back on on a rainy day.

It’s a much more sensible idea to put aside a chunk of your incomings each week into a savings account before spending what is left over.

Over time, you will build a nice pile of savings for yourself that will come in super handy when you really need it.

Track What You Spend

Do you ever track what you spend? If you’re reading this article, it’s unlikely that you do.

Sometimes it’s hard to write a budget if we don’t even know how much we’re spending on things. Just guessing that you spend X amount of dollars on alcohol each month is no where near the same as knowing a precise figure.

And when you’re looking to manage your money more wisely, precision matters.

Buy yourself a small notebook. For the next month, make a note of every single penny or dime you spend. Make a note of everything, from how much you spend on your gas meter to how much a glass of wine cost you last night.

This may sound boring, and you may get fed up of doing it after a few days. But it’s important that you keep it up for at least a week so that you know where your bad habits are, and what you need to cut down on.

Create A Calendar For Your Bills

The last thing you want to see are your bills staring at you from a calendar on the wall. But creating a calendar for your bills makes yourself accountable, and it also shows you how much needs to be put aside for what, as well as when each bill needs to be paid by.

This is crucial, as it will help you to stay on top of your bills, and prevent you from falling behind with things.

And what happens when we fall behind? They pile up and we get stressed!

Managing your money is a matter of getting organised, and a bills calendar helps to this end.

Check Out Comparison Websites

You’ve seen the advertisements on TV for comparison websites (we’ve all seen them), but have you actually checked them out? If you’ve resisted so far, it’s time to give them a try because you might be spending much more on your food, insurance, cell phone and car than is really necessary.

Comparison websites show you where you can save yourself some money.

Put Together An Emergency Fund

What do we usually do when we need cash quickly for something but there isn’t enough in our bank account? We usually turn to our flexible friend, the credit card.

Worse still, we might take out a loan or – even worse – visit a loan shark who charges crazy interest rates.

To prevent this from happening, it’s a super idea to build an emergency fund for yourself that can get you out of trouble at a later date.

It will also save you from heartache at Christmas when one of those unexpected bills lands in your letter box!

Spend Less!

It sounds simple, doesn’t it? But it’s true. Now that you’ve been tracking your spending, you can take a look at areas where you can spend less.

To do this, you might need to change your mindset and your routine.

For example, do you really need to buy that caramel latte from Starbucks each morning before work? Could you not buy a cheaper drink or, better still, prepare a flask at home?

There are easy ways of saving money by spending less. For a lot of us, it comes down to lifestyle choices and changing the way we perceive things. A nice watch might make for a good status symbol – but is it really necessary?

SUBSCRIBE AND GET FREE FRESH TIPS RIGHT INTO YOUR MAILBOX

* indicates required
← 10 BAD HABITS THAT MAKE YOU WASTE YOUR PRECIOUS TIME 10 SIMPLE TIPS TO DEAL WITH STRESS →

Leave A Reply