It does not matter how much money you make in a month but managing your money should be prioritized. A good financial plan helps many people to save money and avoid excessive spending on unnecessary items. Plus, they can also learn how to invest, which is a good thing for the long term.
Once you are financially stable, it will be easier for you to achieve any financial goals, whether to buy a car, a house, or travel. In addition, it helps you to have a proper plan on how to settle your debt or manage your credit card.
Being financially stable is not only about saving money. It involves being confident with your finances and not worrying about any bills. Not only that, but you also have enough money for any emergencies. Having the money does not mean that you can spend it on anything you want, as you must consider your expenses before the next payday.
If you are a beginner and not a math whiz, don’t worry because you are at the right place now. Here are some tips on how to manage your money.
Decide on a Budget
Setting up a budget can be boring for some people as they would have to list out every single expense they have in a month. However, it is essential to keep track of where you spend your money. It might take a long time, especially for beginners, as you must make sure that everything lines up, but it will benefit you in the long term.
When deciding on your monthly budget, make sure you create one that fits your lifestyle and habits. If you make drastic changes to your finances, you might not be able to keep up with the budget, and in the end, you will end up going back to spending freely.
Track Your Daily Spending
It is easier to lose track of where your money goes, especially when you make many small purchases. However, in some cases, you might also overspend the budget because you keep on thinking that you have more. Therefore, it is best to track your daily expenses instead of only keeping track of the big purchases.
If you have a smartphone, like the Xiaomi phone, you can download various finance tracker apps. You can add anything that you purchase under different categories such as food, entertainment, clothing, and more through this app. This way, it will be easier to sort out which category you can limit your spending.
However, if you prefer to see it written physically, you can also start your spending journal. Just make sure that you keep all the receipts so that you can write your expenses at the end of each day.
Don’t Commit to New Monthly Bills
After tracking your spending and setting the budget, you will notice that you have some more money at your disposal. However, this does not mean you can simply spend it on what you want. Plus, it does not indicate that you can add more extra expenses monthly.
For instance, getting a personal loan means you have more to pay monthly. Some people think that the bank will not offer a loan if they can’t afford it, which leads to people taking more than they can handle. The bank only knows your financial situation based on what is reported; they don’t know your other commitments. So, you must think thoroughly before taking a loan or a credit card and decide whether you can afford to pay monthly.
Save Up on Some Purchases
The next way to manage your money is by saving up on some purchases. For instance, eating out is nice, but it costs more than cooking a fancy meal at home. So, you can have it occasionally to treat yourself to something nice.
Besides that, if you are a huge coffee lover, you might have spent a lot on buying coffee every day, especially when you want to kick start your day feeling fresh. So, maybe you should consider buying a coffee machine instead. Apart from saving money, you can have your coffee anytime you want. It may seem like it costs a lot the first time you buy it, but you will surely appreciate it in the long run.
Check Out This Nespresso Coffee Machine
Source: pexels.com/ @Liza Summer
Some people might think that investing is a huge thing that involves a huge sum of money, but it is not. There are different ways to invest, and it surely does not require you to pay a lot. When you invest, it helps you generate more passive income besides the pay you receive monthly. There is always risk in everything you do, so make sure you understand investing before starting.
For beginners, it can be hard to stay consistent when you want to make investing a habit. However, once you are accustomed to it, you will have good money management skills. Not only that, but you will have more money for yourself in the future.