Stimulus check. Stock market. Unemployment. Crypto.
These terms have amassed more popularity during the COVID-19 pandemic. Whatever financial situation you are in, we can agree it is important to possess fundamental money management skills.
Many fixate their eyes on get-rich-quick schemes, a plan to obtain high rates of return for a small investment. Even so, money management skills are invaluable traits to possess.
The art is not solely in making money, but in keeping it.
A higher-paying job and a blessing from a relative are helpful occurrences to improve your financial situation. However, for many, boosting their finances can come through implementing a few key strategies.
Even if you feel you dug yourself into a financial hole with no escape, there are many things you can do to improve your situation. Here are six tips to get you started.
6 Money Management Tips
If you want to get serious with dieting, it is important to know exactly what and how much you are putting into your body. Likewise, if you want to improve your finances, you will want to know what, where, and how much you’re spending on a monthly basis. You may be surprised seeing how much money you could save by shaping up some spending habits. Improved money management begins with spending awareness. There are great tools and apps like Mint to help you track your spending in each category — bills, streaming services, dining out, etc.
Consider your monthly income, expenses, and spending habits, and set up a realistic budget you can keep. Ease into it. It would be counterintuitive to create a strict budget on drastic changes, such as never ordering from restaurants when you are currently DoorDashing five times a week. Create a budget you can keep and which complements your lifestyle. See budgeting as a fun and encouraging method to build better habits, such as cooking at home or spending time outdoors. Nevertheless, budgeting is absolutely essential for successful money management.
Go through the subscriptions you are being billed for each month, and ask how much of a value they are to you. You may have even forgotten about some subscriptions you never use. Cancelling unnecessary subscriptions can go a long way in holding onto more money each month.
Paying your bills gifts you with managing your money, accruing wonderful benefits, and feeling good about yourself (keeping your promises consistently). On the contrary, not paying your bills can come at the expense of late fees and other penalties. Being on top of your bills each month is a good, general practice. If the option is available, set bills up for automatic payment so you will not have to worry about them. Plus, a strong on-time payment history will increase your credit score and improve interest rates.
Unforeseen events can transpire at any time. Having an emergency fund as a cushion can bring you peace of mind. Try to contribute with each paycheck, even if it is a small amount. Set up automatic contributions so a certain amount of each paycheck goes directly to this savings account; in this way, you won’t have to think about it. This emergency fund can save you in situations such as a need for big cash quickly, large medical expenses, or even job loss.
Even if you are limited on how much you can invest at this time, small contributions to investment accounts can help you use your earned money to generate more income. The important thing is to get started as soon as possible. Find out if your employer offers 401(k) and how much they match — this essentially serves as free money! Look into some investment strategies and decide how you want to approach it so that you put your hard-earned money to work for more. Do something today that even your future self will thank you for.
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