Being good with working with your money is about more than merely making ends meet. Don’t be worried that you’re not a maths whiz. Great maths skills aren’t really necessary. You only need to know basic addition as well as subtraction.
Life is much simpler when you have good financial skills. How you will spend your money has an impact on your credit as well as and the amount of debt that you end up carrying. If you’re trying to cope with money management issues such a living pay check to pay check in spite of making more than enough money, then here are a number of tips to improve your financial habits.
When you’re faced with a spending decision, particularly a large purchase decision, don’t just make the assumption that you can afford something. Confirm that you can really afford it and that you haven’t committed those funds already to another expense.
Have A Budget
Many individuals don’t budget as they don’t want to go through what they feel will be a boring process of listing expenses and adding the numbers to ensure that everything lines up. If you find that you’re bad with money, you don’t have room for excuses when you’re budgeting.
If all it takes to make sure that you get your spending on track is a couple of hours of working a budget each month, why wouldn’t you do it? Rather than of focusing on the process of creating a budget, focus on the value that budgeting will bring to your life.
Save First, Spend Later
Pay yourself at first. If you do this it’s a sure-fire way towards financial freedom. Utilise the 50/30/20 flexible approach to budgeting. This means that at 50% of your take home pay goes on your needs (bills, food, minimum debt payments), 30% goes towards fun (eating out etc) and 20% goes to future you (debt payments above the minimum, saving for emergencies and investing). If this split doesn’t work for you when money is tight, you can change the ratios as you go.
Cut Your Household Bills And Your Mortgage
For many of us, our household bills make up a significant chunk of our spending. Life is fickle so try to review your budget – as well as your spending – if there’s a change, or at least once every number of months.
You may get a pay increase, which means you are able to save more. Alternatively, you might find your household bills increase. The great news is that it’s quite easy to save hundreds of dollars on your bills.
In addition, you can save hundreds and even thousands by shopping around for a new mortgage or reviewing the one that you already have.
Stay On Track
Don’t let cash slip through your fingers. Transfer a fixed amount of spending money into your card as this will only allow you to spend what you deposit.