Simple Ways To Manage Your Money Better
The COVID-19 pandemic showed us just how much things can change in a short period of time, especially when it comes to our finances. Today, more and more people aim to be more conscientious about how they’re using their income. That being said, learning how to better manage your finances can be a journey. To make sure you’re taking the right steps forward in your financial life, here are a few simple ways to manage your money better.
Start by finding a budget that works for you.
Although budgeting seems like a common-sense tool for everyone to establish, the truth is that some people may only have an idea as to how much they’re spending each month. Creating a budget is crucial to knowing where your money is going and allocating funds more effectively to your financial goals. All you have to do is outline your monthly income and any infrequent income from a side hustle or business activities, create a list of all of your recurring monthly expenses and less infrequent expenses (including debt), and come up with some ways you can be spending the money that’s leftover (saving and investing). Then, you can use budgeting strategies like a zero-based budget or a 50/30/20 budget. With greater awareness comes the potential to use your money more wisely.
Learn how to stop impulse buying in its tracks.
From time to time, it’s absolutely okay to treat ourselves. However, some people may see money in their bank accounts or see that they still have available credit on their credit cards and go on a shopping spree. In the former situation, you won’t have any money left to save or invest to improve your financial stability. In the latter situation, you can end up hurting your credit score if you go over your credit utilization and fail to make a monthly payment. This will only increase what you owe as the interest rates and late fees continue to rise over time. You can stop impulse buying by keeping your extra cash or cards in an inconvenient place, putting off your purchases as a reward for yourself once you’ve achieved a specific goal, and avoiding triggers that cause you to spend by finding other coping mechanisms besides spending.
For example, if you’ve had your eyes on some great pieces for curvy women, you can wait to buy this until you’ve hit your income goals for the month and have paid off all of your necessary expenses. Then, when you get that great pair of pants that fit your shape and look flattering, it will feel that much better. You don’t have to restrict yourself from buying anything you need, but buying items that you may only want should be considered before you finalize the purchase.
Figure out your debt situation and stay on top of it.
Debt is a necessary part of life. Whether we want to buy a new car or buy our first home, signing a loan is likely to be somewhere in our future. However, the issue with debt is that it can be easy to fall behind on. Depending on your loan terms, this can mean racking up a lot of debt in a short amount of time or even losing the asset altogether. If you’re currently in debt, determine how much and speak with your loan provider about how you can get a reasonable repayment plan that you can afford. If you plan on getting a new loan like an auto loan, use an auto loan calculator to determine how much you need to borrow and how much you will be paying back over time.
Managing your money is simple, but it does take some time and direction to get everything on track. If you’re ready to manage your money better, take a look at some of the simple tips listed above to get started.