When it comes to money management, there’s no shortage of advice. To help you sort through the sea of information, we’ve selected five simple ways to better manage your money:
- Set a goal & write out a plan. It’s simple: when you know where you’re going, it’s easier to get there! Start by writing down your ultimate goal. Do you want to buy a house; be completely debt-free; pay off your student loans? Whatever your aspiration, put it on paper and write out practical steps to achieve your goal. Be sure to consider how much you’d like to save along the way and what bills you’ll tackle first.
- Create a comprehensive budget. Once you know your endgame and the milestones along the way, you can create a comprehensive budget to manage by throughout the year. You’ll want to track your known income each month, including any bonuses, benefits, reimbursements, and the like. Then, write down all of your expenses. Remember to be thorough; be sure to include living expenses like gas, groceries, and cleaning supplies. And, let’s face it – occasionally, you need to #treatyoself! Don’t forget to budget for the occasional night out or shopping trip.
- Eliminate unnecessary costs. Little purchases may not seem like a big deal at the moment, but they add up quickly. Look for areas daily to cut cost. For example: plan your meals each week to avoid unscheduled dining out; pay bills on time to avoid late fees and penalty charges; take advantage of sales and look for online coupons.
- Automate. We’re in a tech savvy world, take advantage of it! The best place to start is with your bank. Use the automated features they offer: set up payment reminders; schedule bill payments; review your spending; etc. Some banks even offer a money management feature that allows you to plan your savings.
There are several online options, like Mint.com, that connect with your bank and help track your spending, identity wasteful trends and keep track of your total net worth.
- Always know where you stand. As overwhelming as it all may be, make money management a part of your routine. Check your bank accounts weekly, if not daily, to avoid surprises later. Check your credit report annually and consider monitoring your credit score monthly using sites like Credit Karma. Revisit your goals and budget monthly to check on your progress. Don’t let your finances go on autopilot!
As you review your progress, be sure to acknowledge any opportunities for improvement and celebrate your small wins. With time and practice, you’ll have basic money management down to a science!