Properly managing your finances is something that is not taught in many schools. However, it is something that is very important in our lives in order to stay out of trouble financially as adults. If you are looking to better manage your finances, below is a list of personal money management tips to help you in your efforts to maintain personal fiscal responsibility:
1. Save: You should start saving as early as possible. Take a small amount of your paycheck each month and transfer it to a savings account. In no time, you will start to see the account grow. The account can be used as an emergency fund or a rainy day fund.
2. Create a Budget: It is important to establish a reasonable household budget and stick to it. It is essential to make a list of your monthly expenses such as mortgage, any loans, food, fuel, utilities, entertainment, etc, so that you can allocate funds in a way that you are spending less than you are bringing in to the home. Once you know how much you have to spend for each item, you can then look for ways to reduce costs such as discount shopping, carpool to work, etc.
3. Protect Yourself By Having Enough Insurance: You should have insurance coverage which includes: medical insurance, life insurance, car insurance, home insurance, and dental/eye insurance. You never know when there will be an emergency that could result in high bills. Having insurance will ensure protection and give you peace of mind.
4. Always Pay Your Bills On Time And In Full: If you do not pay your bills on time, costs can quickly add up and you will find yourself in deep debt, particularly with credit cards. If you do not trust yourself with a credit card just keep it on hand for emergencies.
5. Maintain Financial Records: There are credit counselling agencies or debt management agencies that can help you create a budget and create a monthly bookkeeping program. There is even accounting software that is very easy to use. Most accounting software programs allow you to track bank account balances, spending, monthly expenses, etc.
6. Stay Away From High Interest Payday Loans: There are so many payday loan companies available today advertising their business that can be very tempting to get one when funds are low. However, the interest rates are enormous which often makes it difficult to repay in full. In a short time period, one can find themselves in serious debt. If you are in way over your head with credit cards bills and loans such as payday loans, consider debt consolidation through a debt management agency or credit counselling agency.
The best defense against overwhelming debt is properly managing your money. From saving to budgeting, there are effective ways to maintain your finances. Learning how to manage your finances is not only essential to preventing debt, but also getting out of debt. In today’s economy, it makes sense to make your money work for you.
