Control over money is a skill that, although simplistic in its art form, is extremely difficult to acquire especially in this fast-food and free delivery era. The ability to consciously and carefully organize where and how your money will be spent for a certain period is one that can, on its own, change your entire life.
We all know it, most of us are aware that our spendthrift lifestyle is the root of all or most of our financial problems, but still, we just can’t seem to get a grip on it. You need to find ways that’ll help you slowly and gradually begin to better manage your money and make more informed financial choices.
6 Top Ways to Easily Manage Your Finances
Money management is the ability to judiciously take control of your income and expenses to ensure you stay on the right side of the line. Here are (7) tips that will help you start your way into financial freedom and more importantly, security;
1. Learn to Budget and Save
These are crucial tools that you have to learn to help you manage your finances. Although some people tend to view budgeting as a cage or a restraint, budgeting, just like scheduling, is a tool that gives you more wiggle room and flexibility if used properly.
Saving is also important, it helps boost the confidence to have some money in the bank. These two habits are integral to how your financial life fares in the future. There are several budgeting and saving tools available according to your present level and preference.
2. Handle your Debt
One of the most hated words in the English language is debt and for good reason too. Debt is the opposite of financial freedom, it keeps your money going somewhere that isn’t beneficial to your survival, and that is a luxury you can’t afford.
Unless the debt you’re about to incur is an exception to the previous statement like car loans, hospital bills do not take it. Every dollar you owe should be paid back as soon as possible, that is a good step towards financial security and budgeting is a fantastic tool to help you do just that.
3. Consolidate your Income and Expenses
If you ask a random person how much they spend every month, they are never really able to accurately answer 97% of the time. The same can also be said about their monthly income stream unless they earn a salary.
This is not a random situation, most people have no clue on how their balance sheet looks and this is just a recipe for disaster. Learn to properly balance and compare your expenses to your income, this another important step towards a healthy financial life.
4. Create an Emergency Fund
Consider these two situations; You were forced to walk a tightrope across a lagoon filled with lava or if you were to walk that tightrope across that same lagoon of lava but with a safety net below, which situation will you pick? The second of course! That’s much safer.
And that is exactly what an emergency fund is, a safety net as you walk this tightrope called life. Anything can happen and nothing gives you peace of mind better than knowing you can handle any emergency.
A $5,000 fat emergency fund will do just fine, for a start, you can work it up as you advance in life.
5. Set Your Priorities
Make it an effort to study and learn your spending habits, this will go a long way in helping you keep more coins in your purse strings. Know how much you spend on what, dig deep, find out and list what the most essential items are that you absolutely must spend on like utilities, phone bills, fuel, food, rent, etc.
Then you can work your way down from there, this process is going to help you when you want to start saving and budgeting and also balancing your finances as you become more clear on your spending.
6. Set Money Goals
Setting goals, in general, is a great way to go about achieving anything and financial freedom is no exception. Take some time to figure out how you want to fare financially in the nearest future, 5 years, 20 years, and use what you find out to make a financial plan.
Setting money goals, according to the calendar budget, has the added advantage of keeping you on track whenever you falter along the way.
These are six steps that if taken, can take you a lot farther in your financial journey than you ever thought possible. This list is by no means exhaustive, but it will get you on the right path. Staying on the green side is not just about how much money comes in, also includes how much stays when it comes in. Remember this and your finances will thank you for it.