5 Effective Money Management Tips
You might have come across people, who often complain that they are unable to save enough? Many people earn decent salaries yet they struggle to meet both ends. There are many others who say that their money isn’t growing. Well, first of all, money doesn’t grow on its own. You need to channelize it appropriately so that it grows.
Secondly, you can save decent amount of money if you know how to manage your money. Here are 5 easy money management tips that can help you in establishing a secure financial base. These money management tips are universal in nature and they can be tweaked and modified for better results.
Set a financial goal: it is important that you know what you want to achieve before you kick start your money management program. Set realistic and practical goal. It shouldn’t be extremely easy to achieve nor should it be impossible to achieve. You can probably set a goal of having a cash reserve fund of x amount or a goal stating that you will pay off your cards or card within next x months
Maintain an income and expense account: many people don’t realize where they spend the money. Often impulsive shopping, leisure travelling and other things can contribute to your significant expenses. You must maintain an income and expense account. Keep track o every penny that comes in and goes out.
You must maintain the sources of income along with the dates and amount. Similarly mention in detail where the amounts were spent. Maintain a weekly track of how much you earned and how much spent. You will automatically realize where you are spending unwanted amounts and you will curb it.
Make more than minimum payments on your cards: many of us think that making minimum payments is enough however we don’t realize that minimum payments just help us to keep the card active. We are realistically not paying off the principal debt hence you must make an attempt to pay off at least ten dollars extra on every card. You will be surprised to know that these extra 10 dollars can reduce your repayment cycle by one third.
Earn more: money management necessarily does not meaning cutting short on expenses. You should also find ways to supplement your income. You may want to take up a part time job or join online paid survey programs. Additional income should be saved separately.
Create a liquidity account: it is always best to save for the rainy day. This is one of the most important money management tips. You must always create a cash reserve fund. This fund should at least have savings that can be used to live in the same manner for next one year, in case you lose all your earning sources. This reserve fund should be accessed only in dire emergency.
Follow these 5 tips and see how you can manage your money better than before.