10 ways to manage your money and improve your financial situation
Managing your money for financial success isn’t just about regular savings and living a frugal life. It’s also about putting your money in the right places and guiding your finances towards your goals. Taking good care of your hard-earned cash almost becomes a way of life.
In this week’s blog, we discuss effective ways to take care of your finances. This includes some simple methods that can lead you to financial fitness. Money management is easier than you may think – it just takes a pinch of effort and a dash of consistency.
1. Address any debts you have
Taking accountability and managing your debts is an essential first step in handling your finances. Looking forward to a better financial situation isn’t easy when you’re constantly looking over your shoulder at the bills you need to pay.
Create a strategy to clear your debts and make sure to avoid future liabilities unless they are absolutely necessary. Getting those debts under control will reduce any money-related anxiety you may have and clear the runway for financial stability.
2. Integrate money management into your life
Create a strong and healthy relationship between you and your money. Like any relationship, you must take care of it for it to grow and take care of you in return. Take the time to have a good think about what actions could foster growth and which habits are hurting the relationship. It’s crucial you respect the money you earn and make sure it doesn’t all disappear from pay-day to pay-day.
3. Create a budget
Think about your cash flow when creating your budget plan. Consider your income, and your non-negotiable expenses such as rent, mortgage repayments, utilities and school fees. Create expense categories and plan how much you will allocate for each from your weekly or monthly income.
Directing where your money goes through the budgeting process is as simple as it sounds - but it’s hard to execute, so stick to your guns and ensure you stay consistent throughout your budgeting journey.
4. Reduce your expenses
Creating a solid financial future takes some discipline. Try hard to avoid the temptation to impulse buy or splash out. Think twice about buying unnecessary things and be sure to always consult your financial plan before making any big purchases. It’s a good idea though to include an amount in your budget for some little luxuries – after all, you’ve worked hard for your money, and you deserve to enjoy some of it. So, make sure you put aside enough for the occasional dinner out, movie night or whatever indulgence you want to look forward to.
5. Track your spending habits
As you reduce your monthly expenses, make sure you keep track of your spending habits. Whether you keep a spreadsheet or use a budget planner, it’s important to be honest about the habits you have developed over the years. Being able to track and rectify any bad spending habits is one of the best money management tools you will ever use.
6. Invest wisely
Managing your money doesn’t always mean sticking it in the bank and hoping it will grow. Sometimes, it means looking further afield so it’s a good idea to enlist the services of a financial adviser or financial planner to help you develop a strategy that you’re comfortable with. The right investments can lead to solid financial growth over time.
7. Save, save, save - early in your career
Saving money early in your career means more money saved and more interest accumulated over the years. When you’re in your 20’s and 30’s it seems like you’ve still got a lifetime ahead of you, but the sooner you start planning for the future, the sooner you’ll be able to enjoy it. And remember – it’s never too late to start, so whatever age you are right now, today’s the day to take action.
8. Control your impulses
Stay away from environments that cater to your spending compulsions, such as online shops, luxury brands, and products that frequently go on sale. If you have a history of impulse buying, ask yourself if you really need that item before you rush in and buy it. If you consider your budget to be absolutely untouchable, get into the habit of negotiating with yourself within the limits of your budget.
So, if you really can’t live without those sunglasses that are 50% off, before you buy them, make a deal with yourself about what you’re going to miss out on from your budget if you go ahead with the purchase. Life is all about compromise, and there’s no harm in reallocating budget items from time to time - so long as you stay within your total weekly or monthly budget.
9. Create an emergency fund
Another critical way of handling your finances is to create a separate fund to prepare you for unexpected emergencies. Unwanted events, such as car repairs or medical expenses can really take a toll on your finances, especially when they are not part of your usual budget. But by creating a separate bank account for your emergency fund and incorporating it into your budget, you’ll be able to squirrel away some regular funds to cover contingencies.
10. Develop a timeline that works for you
Create your own timeline of financial goals by reflecting on your lifestyle and what you would like to achieve over the next 5, 10 and even 20 years. Pay particular attention to what you can afford to save, invest, and spend in a month and check that your goals are realistic. Understanding your capabilities and having pragmatic expectations will help you to follow your timeline.
Final thoughts
Developing a sound money management strategy can be a bit intimidating at first. But if you take a considered approach and have plenty of self-control when it comes to spending, you’ll be able to improve your financial situation like a pro. And if you need a little help to consolidate your debts and get them under control, we’re here to help. Just take a look at our cash loans up to $5,000 to find out how quick and easy it is to get your hands on some extra funds. Once a loan is approved, the cash is usually in your bank account within a few hours - so you can really start kicking those financial goals!