School is great for many things, but there are some things that it doesn’t prepare us for, and managing money tends to be one of them. Being good with money and being able to manage it is essential if you want to live a comfortable life and be able to have some money left over for vacations or trips or even just to have a meal out once in a while. When you have good financial skills, life suddenly becomes a lot easier. So if you want to improve your financial habits, here are some easy ways to manage your money.
Don’t Spend Without Thinking
If you need to make a large purchase (or any purchase really), then stop and think before you go ahead. Can you afford it, or do you just want it so much that you’re persuading yourself you can? If the item needs putting on finance, think about how that will impact your monthly outgoings; even if it is only a small amount for that one item, if you have many small amounts going out of your account then it will soon add up and could become unmanageable. Make sure that you really can manage the payment or payments, and ensure that the purchase won’t leave you short between now and next payday.
Make A Budget
Making a budget is not everyone’s idea of fun, and it’s true that picking through all your outgoings and noting them all down, listing out expenses, adding everything up, and making sure you haven’t forgotten anything isn’t an ideal way to spend an afternoon. However, once that budget is complete and you can see exactly where you are spending your money, you’ll be glad you went through with it. You’ll be able to see where there are things you’re paying for that you don’t need, and when you spot them, you can cancel or reduce those payments. You may end up being able to save a large amount of money on your monthly bills in this way. Check the budget on a regular basis to ensure that it all still holds true. If you make a purchase using payment plans or pay a credit card or loan off completely, make sure you adjust the figures to show your new potential spending or savings amount.
Go Unbudgeted
We’re not contradicting ourselves here – it’s important to budget and to stick to what you’ve got, but it’s also important to have fun. So try to keep a certain amount of money to one side per month which you can use in whatever way you want; you might get takeout or go to a restaurant, perhaps you’ll see a show or buy some new shoes. It doesn’t matter what it is because that’s the point; it’s fun money. This money doesn’t need budgeting minutely, as long as you know how much you’ve got to play with.
Get An App
Using financial planning apps to track your spending a wonderful idea. Not only are they easy to use, but they provide you with a lot of insight into how and why you spend money, and this could help you save more in the long term. It’s the little purchases you make each month that add up into a problem and can cause over-spending because they don’t seem like such a big deal when you’re handing over the cash or swiping your card. Using an app means that every time you spend money you can make a note of it (or, if it’s connected to your bank account it will do it automatically), then categorize your spending. This way you can manage your money much more easily.
Shop Around
Thanks to the internet and the plethora of online stores, it is likely that you will be able to compare your potential purchase before you commit to paying for it. This way you can make sure that you are paying the lowest price you can. Be sure to take any shipping and handling costs into account as these can make what looks like a great deal become a lot more expensive. As well as shopping around for the best bargains you can also look for coupons and discount codes or even cheaper alternatives to what you were going to buy. A good idea is to put the difference between what you paid and the most cost of the expensive version of the item into a deposit account; you’ll be more likely to look for cheaper ways to buy when you know you’ll be able to put more into your vacation or clothing account.
Save Up
Today is all about instant gratification; if we see something and we want it, we get it. However, this way of thinking can mean that many of us end up in financial difficulty, overspending on things that we don’t need or even particularly want. If you do want something, then the best way to buy it is to save up for it. It will, of course, take longer, but it will be worth doing because you’ll know as you buy it that you worked hard to get it; there will be a greater degree of satisfaction in that. Not only that, but you’ll know you won’t have overspent and left yourself short, and neither will you have to pay the interest that would be due if you bought the item on a credit card. Another bonus in saving for something is that by the time you have the money you may not even really want it anymore, so you can spend your money on something else.
Limit Your Credit Card Use
If you aren’t great with money then limiting your credit card usage is a clever idea. Many people run out of cash and then turn to credit, but they don’t give any thought to how they will pay anything off, or how long that might take them. Credit cards can be useful; they can actually build credit, for example! However, the key is to pay off as much as possible – preferably the entire balance – every month. If you limit your credit card spending and make the largest payments you can, then you’ll realize that although perfect in an emergency, it’s far wiser not to use them for everyday purchases.
