One of the most important things you should learn in life is how to take control of your finances. Poor money management is a problem that affects a sizable percentage of Americans, and given the key role money plays in our lives, putting your finances in order can save you from a lot of headaches. But like other good habits, managing your money takes time to understand and requires a commitment to improving on. Here are some of the best ways you can keep your financial life in good shape:
Learn How to Create a Budget
Creating a budget is one of the first steps you need to take to manage your financial resources well. At first, you might find it a bit difficult to design and stick to a budget, but you will realize it pays off in the end. When you budget, you will be able to see your financial situation with clarity and full transparency. To begin, ensure that you understand your expenses as well as income, so you can manage your money better. A number of apps are available online to create a budget and manage your finances, prudently, such as Mint (Android, iOS); Acorns (Android, iOS); PocketGuard (Android, iOS); etc.
Try to Consolidate Your Debt
Everyone dislikes debt. It can disrupt your peace of mind and expose you to stress and even some health risks. To get your debt (like credit card debts, student loans, and others) under control and work toward clearing it, the first thing to do is, looking for ways to consolidate them and getting the lowest interest rate possible. And do keep in mind that taking the proper steps to manage your finances well will go a long way to help you stay out of debt.
Consider Slashing or Removing Unnecessary Expenses
Endeavor to only purchase things or subscribe for services you can’t do without. Learn how to manage your money more prudently by taking into account everything and every penny. Though there is nothing wrong in engaging in some activities for fun once in a while, try carrying out some spring cleaning and slash expenses anytime there is an opportunity, and particularly if it is not something that will have a major impact on your life.
Change the Way You Deal with Money
Here are some quotes that can help change your orientation about managing your finances:
- “Buy when everyone else is selling and hold until everyone else is buying. That’s not just a catchy slogan. It’s the very essence of successful investing.” — J. Paul Getty
- “You can only become truly accomplished at something you love. Don’t make money your goal. Instead, pursue the things you love doing, and then do them so well that people can’t take their eyes off you.” — Maya Angelou
- “Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.” — President Franklin D. Roosevelt
- “Know what you own and know why you own it.” — Peter Lynch
- “Many folks think they aren’t good at earning money, when what they don’t know is how to use it.” — Frank A. Clark
- “I will tell you the secret to getting rich on Wall Street. You try to be greedy when others are fearful. And you try to be fearful when others are greedy.” —Warren Buffett
- “It’s good to have money and the things that money can buy, but it’s good, too, to check up once in a while and make sure that you haven’t lost the things that money can’t buy.” — George Lorimer
- “A wise person should have money in their head, but not in their heart.” — Jonathan Swift
- “There is a gigantic difference between earning a great deal of money and being rich.” — Marlene Dietrich
- “Expect the best. Prepare for the worst. Capitalize on what comes.” — Zig Ziglar
Other Steps to Take to Develop Your Money Management Skills
- Create an emergency fund
- Save 10 –15% for your retirement
- Review & understand your credit report