Anyone wanting to better their finances must start by putting together a plan and actively managing what’s in front of them. Knowing your financial situation, how much money you’re making, and what money is coming out makes it easier to hit your financial goals. Basically, managing money takes the right tools and discipline.
For some, gaining control of their finances takes years because they lack fundamental management skills or have yet to enact a plan.
No worries – I’m here to help! I’m writing about this topic because I’m a leading behavioral change expert and bestselling author – and a columnist for both Oprah and Psychology.
I’m also the founder of the therapist recommended program The Tweak a Week Online Course – which helps people to make small, positive changes in their habits that lead to big results.
Basically, I’m a research geek on understanding human behavior – so I put together this article with tips for managing your money better.
Here are tips for money management.
List your income, expenses, debts, and assets. To start, create a balance sheet for your financial situation so you know what you’re working with.
Budgeting apps can track your spending and transactions, helping you understand where your money goes and if those expenses are worth it. A checking account complements this by keeping all your transactions organized in one place. It’s easy to open a checking account online, often in just a few minutes from the comfort of your home. With everything set up, you’ll quickly see how even the smallest purchases can add up over time.
Your credit score has everything to do with money management. Get a free report and ensure there aren’t any unknown debts or issues that must be resolved.
Work on improving your credit by paying bills on time, clearing away debt, and not submitting too many credit applications. This will help your current and future ability to qualify for loans and receive money when you need it most.
Outline some goals. Short-term goals are for six months. Medium-term goals are for 2-5 years. Long-term goals are for ten years and beyond, such as retirement. After setting your goals, determine what it will take money-wise to get you there.
You are buying your first home, saving for a car, and buying a special item. Start a savings account for each savings goal. Set up your budget so that a part of what you make monthly is put into each. This will keep things moving in your favour.
When planning a budget, make it realistic. If it’s not, you won’t stick with it, and failure doesn’t feel right. Pay extra attention to realistic numbers for your income/expense split to stay motivated.
Don’t just cover your monthly expenses and pay down debt with your budget. Save as well. A strong budget will help you save money and pay down debt at the same time. This puts your future in the best possible position.
If you’re in an emergency or experiencing a financial setback, you may need immediate cash to get you to your next paycheque. Payday loans come in here. They can provide a cash advance on your next paycheque under fair terms. Have a payday lender in your back pocket if you ever need emergency cash not readily available.
For many people, budgeting means having little to spend. Set aside some money for a reward bi-weekly or at the end of the month. If you hit your goals, enjoy a delicious meal or something special but affordable. It allows you to spend some money and have some fun.
The faster you pay off your debt, the less interest you pay. If you can spare any extra money, put it towards your debts. In the long run, you can keep more of your money and be closer to financial independence after your debts are paid.
Money management includes income. If you are still looking for a better income, look for ways to increase your income. Ask if there is overtime available. Consider a second job if your schedule allows it. Consider investing in education to get a higher-paying position.
With money, you can make more money. There are many ways to do this, including investing in stocks, purchasing real estate, or even finding a savings account or bank with a higher-than-average interest rate.
Accepting a roommate into your living space or home lowers your rent or mortgage payment. This is an excellent example of creating more available money by reducing your expenses as much as possible.
Set aside a percentage of every paycheque to be automatically deposited into an emergency fund savings account. Cap off your emergency fund at six months’ living expenses. This way, you’re financially protected in an emergency and have the financial support to keep going.
If you want greater financial security, follow these money management tips and you’ll be managing your money better quickly! Want further support to better handle your money? Learn more about my private one-on-one Mindset Mastery Sessions here.
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