It’s probably fair to say that the majority of people don’t manage their personal finances very well. If that’s you, then you’re not alone. Often poor money management is simply a matter of not knowing any better or being aware of the best ways to do it.
In this article, we’ll take a look at a series of actionable tips you can follow and embrace to improve your financial situation. Soon you’ll be a money management guru.
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Are You Really Aware Of Your Expenses and Spending?
This point is critical. If you only have a vague idea of what you spend your money every month, then you’ll have little idea about how to manage the money you do have.
If you were asked how much money you spend on average, in total, every single month, would you have a fairly accurate idea or not? Most people can hazard a guess, but would probably end up being signed off the mark.
It’s an interesting exercise to keep tabs on what you spend each day. If you wrote down everything you spent over an entire month – whether it be billing, food, buying some beer or whatever – by the end of the month you’ll likely be very surprised by the results.
Create a Budget and Maintain It
Now that you have a far better idea of what you’re spending per month and on what, it’s time to formulate a budget as this will really help you manage your money and get your finances (and loose spending) under control.
Everybody has certain expenses every single week or month that they have to pay. Then there will be another spending on ‘optional extras’. Things, like going to the cinema or having a meal at a restaurant, would fall under the second category.
Mandatory expenses like rent/mortgage, utilities, food and so on should be prioritised on your budget with a monthly total at the end of the list. You can then create a secondary budget for non-essential expenditure. This way, you’ll know exactly what you must allocate for certain expenses and how much disposable income you have leftover.
Cut Back On Unnecessary Expenditure
This doesn’t suggest you have to live your life like a scrooge, but most of us waste money left, right and centre and don’t even realise it. The more you are aware of where you waste money and cut it out, that’s money you could save and potentially invest, increasing your revenue with residual income.
These money leaks might only be small individually, but they all add up to a noticeable amount over time. Plugging these leaks can vastly improve your financial outlook.
A Small Cash Loan Is Better Than Using a Credit Card
If you really find yourself in a critical situation financially and perhaps don’t have enough cash on hand to pay some bills, then you’re far better off getting a small same day loan than using a credit card.
The reason is that fast cash loans provided by lenders such as Sunshine Loans have much lower interest rates than credit cards. Typically the interest rate on small loans of around $2000 is only about 4%. Compare that to most credit cards that range anywhere from 13% up to almost 20%.
Always Save a Portion Of Your Income
This point was mentioned in brief earlier, but it deserves its very own section. Even if you managed to save just 10% of your income every month, you’d be surprised how rapidly it accumulates. As said before, you may earn compounding interest on this money in a long-term savings account, or you could invest portions of your savings in real estate, stocks, business and other investment opportunities. This is how abundant to build wealth.
Continually Educate Yourself On Money Management
With information freely available at your fingertips 24/7 in the internet age, you have all the resources you must learn more about money management and wealth building. All you have to do is search online, and you’ll discover thousands of helpful resources, apps, worksheets and advice on how to manage your cash and make the most from your income.