Money management isn’t easy; most people find that they struggle with this at one point or another. However, if you’re finding that you are out of pocket more often than not, it’s time to consider how to better to manage your money. Below are a list of helpful hints and tips for money management.
Know your income
Be aware of what exactly is going into your account each month. Don’t simply divide your annual income by 12: there are a different number of weeks in each month and your pay check will vary accordingly.
Create a budget
A budget should first take account of essentials and non-essentials. Once you’ve accounted for all bills, taxes and other payments, you can get a better idea of how much money you’ll have each month.
Your budget shouldn’t stop here: take account of how much you spend a week on groceries. When you have paid your bills, taxes and for food and essentials, how much is left? That is your budget.
Essentials and non-essentials
Whether it be bills, debts or groceries, knowing the difference between what you want and what you need is key to money management.
Hold onto your receipts for a month to see what your money goes on: you’ll be surprised what’s non-essential when you realise how much money you’ve been wasting.
Do you need the latest phone/mp3 player?
Dishing out a hundred dollars a month on a contract for the latest Smartphone may not seem like a lot, but the idea of paying close to a thousand a year for a phone isn’t logical if you cannot afford petrol for your car or you’re living off baked beans.
The price of a smartphone is just too much – especially for parents who may end up paying over a grand a year on contracts for the family. Find a better deal on a less hi-tech phone and save hundreds.
Pay in Cash
It is much easier to manage your money by paying in cash. By carrying cash, you can see your money disappearing, meaning that you can manage it more efficiently.
Cut down on travel costs
Walk or take a bus to work instead of driving or taking the train. This will save you money and is better for the environment.
Beware of hidden costs
There are hidden costs everywhere, from shipping to service charges. Make sure you know exactly how much you will be spending before you step inside a bar/restaurant, or before you place your online order. It is easy for these hidden costs to add up.
Pay your fines
Paying back your overdraft or credit card debt is essential. Similarly, paying fines on the spot are easier than paying a larger fine later.
Save the cents
Saving your loose change in a jar or piggy bank really will provide you with a little extra cash.
Ditch the credit cards
Credit cards may feel like a saving grace when you’ve run out of money, but they are a poisoned chalice.
You should never spend money you don’t have, especially if your money management skills are already poor. Learn to budget – otherwise you will find yourself in a continuous state of debt.