Struggling to look after those pennies?
Money management is one of the great underrated and under-taught skills of our time. Yet many people who try to correct that simply don’t know where to start. The truth is, there’s no need to complicate things.
Here’s a quick and easy guide to managing money that you can start today.
Track Your Balance
The first step to money management is understanding where your money is going. Track your spending for a month and categorize your expenses.
Many people struggle to manage their finances because they’re working with incomplete information. One of the reasons a business tracks every incoming and outgoing cent is that it provides ways to predict and control. So think like a business and seize control over your finances using total information.
Create a Budget
Once you know where your money is going, it’s time to make a budget. Determine how much you need to spend on essential expenses like housing, food, and transportation. Then, set aside money for savings and discretionary spending.
If you find that your expenses exceed your income, don’t be discouraged. Instead, look for ways to cut costs. For example, you might need to downsize your housing or transportation costs.
Still, you might not even need to make changes such as those. Studies have shown that virtual spending has made us less aware of what we spend, so budgeting is a way to reclaim that awareness. In turn, that could reduce your spending.
Keep Charges Down
Life is full of little extra charges. ATM fees, late fees, service charges—they can really add up. To keep your charges down, try to use ATM machines that are in your bank’s network. This way, you won’t be charged a fee for using another bank’s machine.
Take care when doing things that might attract special fees. For instance, check out guides like this one on wiresmartly.com when sending money overseas. A little bit of research like this can save you a lot of cash.
Automate Your Savings
One of the best ways to ensure that you save money is to automate the process. Set up a direct deposit from your paycheck into a separate savings account. Then, make sure that you don’t touch the money unless it’s for an emergency.
By turning saving into another expense in your month, you make it compulsory, just like paying your bills. Taking that decision to save out of your hands is one way to ensure it actually happens.
Small Savings are Big Savings
Saving money doesn’t have to be a huge undertaking. In fact, even small changes in your spending habits can add up to big savings over time. For example, if you save $5 a day, you’ll have $1,825 at the end of the year.
You could easily save that $5 by making tactical choices while you shop, shaving off a dollar here or there. Over time, these little changes compound in huge ways.
Start Managing Money Today
Managing money doesn’t have to be difficult. By tracking your spending and making a few simple adjustments, you can quickly start putting away money each month. So what are you waiting for? Start saving today!
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