14 Ways To Manage Your Finances
Managing finances is challenging due to the numerous financial responsibilities we all have, not to mention the outcome of mismanagement, which results in spending more money leading to debt. However, this should never be the case, especially when following these 14 steps diligently.
1. Open a Savings Account :
A savings account is very important, as this is where your savings will be stored. Open an account at a bank where you will not be charged any fees, as this would defeat the purpose of saving in the first place. Set up automatic contributions into this account, as it is harder to spend money that you do not actually see. Your savings account will help you pay yourself before you begin paying off debts and other expenses.
2. Invest :
Always invest in low-cost mutual funds. If you opt to invest using a financial advisor, be sure to know all the expenses and fees associated with such investments ahead of time.
3. Track Every Penny When Spending :
Know where every bit of your money is going if you intend to save. You can downsize your housing costs by downsizing your housing situation, especially if you have plenty of room that you do not need or use. Downsizing in this way will save you money on mortgage, rent, and utility bills. Make sure you check every bill for billing errors and bear in mind that everyone makes mistakes.
4. Set Up a Budget :
At the beginning of the month, set up a budget plan that should include fun and entertainment as well as the usual expenses. This will help ensure that all your expenses come from the money you intend to use and not from your savings.
5. Use Cash When Spending :
Always use cash instead of cards as much as possible. You can even divide the money into portions and keep each of these amounts in separate envelopes, but make sure that each envelope is used for the intended purpose, and when you run out of money, you can then stop spending. This is a very good way to make yourself accountable and stay within your budget. You can also create a charity envelope, where you put money that you intend to give to charity.
6. Review Your Expenses :
Review your expenses quarterly (or at any other frequency that you feel comfortable with). This action will help you do away with unnecessary expenses that you may have been incurring for some time (for example, subscriptions you do not need).
7. Save Part of Every Raise :
Do not let your expenses grow when you get a raise, but opt to save that money instead.
8. Start a Change Jar :
When you spend cash, you get change both in coin and bill form. This change can be put into a jar, which should be deposited into your savings account when filled up.
9. Research the Best Prices for Large Purchases :
If you are making a large purchase, ensure that you do enough research so you get the best possible deal for that product. Look into prices at local stores and online businesses for the best deals.
10. Search for Promo Codes :
One of the easiest ways to manage your finances and save money on purchases is by searching for promo or coupon codes. You will be surprised at how much money you can save by doing this.
11. Stock Up On Items That Don't Expire (Especially When they are On Sale) - Stock up on an item, which you regularly use that is on sale and does not expire (for example, toilet paper or tissues).
12. Shop at Thrift Stores :
Thrift stores are great places to pick up quality items at discount prices. Avoid buying items at convenience stores, as there is a chance you are paying more for the said item.
13. Avoid Window Shopping :
People love window shopping at the local mall when they are on break. Due to this, many people end up purchasing something they had not planned to. To avoid this, try not to go window shopping and if you do, make sure not you do not carry any money or cards with you.
14. Carry Your Lunch to Work :
This saves a massive amount of money. Take last night's leftovers and pack them up or make yourself a sandwich.
In conclusion, to be able to properly manage your finances, it is important that you make a complete mental shift from being a spender to a saver. It has been proven that once you shift your internal priorities, your external actions will follow suit and you will see a financial change for the better.