Learning how to manage your money is an important life skill. Unfortunately, money management isn’t a class in high school, so many people never learned how to budget, track expenses, etc. Whether you’re a college student trying to make ends meet or a working woman just trying to stay on top of your bills, everyone needs these tips in their lives.
Track Your Expenses
The first step to managing your money is figuring out what your expenses are going to be. Expenses are all those lovely little monthly fees you need to pay for in order to ensure your survival. Stuff like your rent, electric and water, cell phone, groceries, and the monthly payment on any credit cards you have. Add them all up and then subtract that amount from your monthly income. What I like to do it is split whatever is left over after all my bills are paid in half. Meaning after all my expenses are paid, half of what I have left goes to my savings account and the other half is what I get for spending each month. Sure there are weeks when I feel like I need more money, but living within a means sometimes means you don’t buy a pair of boots just because you see there is a sale.
Create A Budget
After you move out of your parents’ house and are living on your own, figuring out how to manage your money will become your most important task. Sticking to a budget sounds easy when you say it out loud, but it is a lot harder than you think. Even when we make our budget and stick with it, there are always going to be little temptations that derail us for a little bit. So stay away from distractions! If you are trying to budget then there is probably an end game you have in mind that makes all the struggling worth it in the end.
List Debt and Make A Pay Off Plan
Even though paying off debt means losing money instead of saving money, it is still something that needs to be done. It’s a part of learning hot to manage your money. Unfortunately, any outstanding bills you need to pay off aren’t going anywhere, no matter how much you would like them to just pay for themselves and go away. If you are trying to save your money while paying off debt, make a list of what you need to pay off and how much there is. From there, slowly put a bit of money towards each bill each week. You can do ten dollars towards each one a week or put all them on rotation and pay 100 dollars for one per week. As long as it works for you then it is the right way to pay down your debt.
Commit To No Spending Days
I know a no spending day sounds impossible. After all, you have bills to pay, groceries to buy, and you really want to get a new dress for that party next week. It might sound impossible, but trust me it’s not. Take a look at your week and pick whichever is the least busy. Chances are you probably won’t need to buy anything that day if you tell yourself you’re not supposed too. Once you get into the habit of it, you’d be surprised how often you are glad you didn’t buy something frivolous because you needed the money for something else later.
Create An Emergency Fund
Be prepared isn’t just a slogan for the boy scouts anymore. When it comes to your financial stability you should always have an emergency fund set aside for unexpected problems that require a nice chunk for change. This is an aspect of learning how to manage your money that a lot of people don’t think of. You never know when something might go wrong with your car or you have some sort of medical bill to pay off, so as you are saving, remember to put aside a little bit each week so you can always be expecting the unexpected.