There is a possibility that a lot of us are incredibly bad at managing money, and I feel that it is something that we should have learnt in our schooling. Some of us don’t know how to manage money but are still bad at it because of certain things that we go through. Bad money management is something that we can get through; it is something that we can get better at. A good portion of the United States of America doesn’t exactly know how to manage their money really well, according to a recent survey. Some sources have been known to report that Americans are actually pretty bad when it comes to finances, when compared to other developed countries like the United Kingdom, et cetera. I do think that there is some hope for some of us out there to become good managers of money.
In this article, I will be talking about some great and loved, tried and tested strategies that you can internalise and become a good manager of your finances.
So, let’s take a look.
Having a good money management plan can be like the light at the end of every tunnel, especially for people who are trying to get their financial life in order. Can be incredibly hard to make ends meet when you do not earn enough for certain things that you need or want. This is where money management comes into play. If you do not take the right steps to get organised and learn how to be a good manager, it will undoubtedly be an uphill battle for you.
Here are some significant steps to managing money:
It would be best if you cultivated a tried and tested budget. If you earn $4000 a month, you should have $2000 for expenses and rent; the rest can be used as savings. This is just an example; you could be earning more or less, and depending on how much you earn, you need to make decisions. It is advisable to deposit at least 20% to 30% of your monthly paycheque into a savings bank account. Account must not be touched unless it is an emergency. You will understand the point of saving money in a couple of years when you need it.
You need to understand your expenses. Need to gauge if you actually need to spend money on that expensive cappuccino in that expensive Cafe. You need to ask yourself if you need that luxurious hotel room when you travel or that extra expensive phone that you would rather buy when you have more money.
Understand your income.
Make paying off your tax and debts as a priority, so that you don’t have to pay interest.
Cut out unnecessary expenses and create an emergency fund.