9 Suberb Ways To Healthily Manage Your Money
Managing money is a crucial aspect of life, most times people get it wrong and end up overspending without saving even a cent. Some even run into debt which may include credit card debts, loan and borrowed funds.
Everyone wants to leave a debt free life and still maintain a healthy lifestyle, it won't be nice to starve because you're managing your money, so i will unveil some ways to manage your money without selling your soul.
In this write up I will be discussing some basic rule for money, like; Planning for the future, saving, having emergency funds, having guilt free spending, maximizing your budget and many more!
Before I delve deeply, I will like to list some of the importance of managing your money, which are as follows:
Increased Productivity: One of the benefits of managing money is the increase of productivity and of course everyone wants to be more productive, you won't be productive when don't have accurate monetary plan as you may run into debt, have no fund for emergencies, no savings which you will need in your nearest future.
Eliminating Or Avoiding Debt: when you manage your money, you'll be debt free or can easing pay off current debt like student loans, borrowed funds, and mortgage, just to mention but few.
Establishing Emergency Fund: Managing your money will help you control emergencies which comes when we least expect, which may include car break down, lost of love ones, medical bills, and more!
Helps You Save More: when you make good use of money, you'll have enough in your savings wallet and this savings can be useful in diverse ways like vacation, purchasing your long term goal, shopping and more!
Having List some key benefits of managing your, lets look at the topic for the day. Note, you can add some more benefits in the comment area.
In this money management article, I will only cover some basic aspects of managing money but will provide you some resources to enhance your money management skills. This article might be a bit so long, so endeavor to pin it and browse later. If you're ready to read then grab some chips and an Ice cream as we ride together.
The 9 Suberb Ways To Healthily Manage Your Money.
1. NOTE YOUR NET INCOME.
Net income is the amount of money you have left after all necessary deduction have been made, this may be Health Care and Taxes.
When calculating your Net Income, ensure you include other sources of income if applicable, this extra income maybe tips, monthly bonuses, cost of living increases, dividends, interest income, side hustle, 401(k), social security etc. It's easy to overestimate your Net income, so always make all necessary deduction and see what you have left...
If you're a freelancer and don't have a fixed monthly income, you can Determine all your essential, priority and lifestyle expenses first. Then, with your paycheck, start paying off all your essential needs first, followed by your priority and then lifestyle expenses. The money you have left over can either be set aside for an emergency account or stashed away into savings.
It's also recommended that those who don't have a fixed income should use their average monthly income of the last six month...
2.TRACK YOUR SPENDINGS.
It's wise to know which area your money is being channelled into, so you'll be able to make adjustments if you feel a sector is eating too much money. One reason most people fail when it comes to tracking expenses is not tracking even the red cent spending. Yeah, you should track every spending you make, you may think it's small but when you add those spending up you'll be amused with how much you've been spending. So don't overlook that red cent spending, Never!
A good approach to tracking your spending is first putting down or tracking your fixed expenses such as rent or mortgage, utilities or car payments. It’s unlikely you’ll be able to cut back on these, but knowing how much of your monthly income they eat up can be helpful.
The Next Step is to list all your variable expenses, those the aren't fixed and may change from month-month such as groceries, gas, and entertainment, etc.
One thing about variable expenses is it can either increase or decrease, sometime remain fixed for a short time, so this sometimes might be a great opportunity especially when the price decrease as you can channel what's left to your savings or emergency funds or even add to your investment.
Also, Credit card and bank statements are a good place to start since they often itemize or categorize your monthly expenditures.
Lastly, Record your daily spending with anything that’s handy—a pen and paper, a Note App on your smartphone.
3.WRITE DOWN UNAVOIDABLE EXPENSES.
I think I've said a little on this but it Worths stressing more on.
In order to manage your money well you should write down expenses that are so crucial and can't for any reason be avoided. Doing will help you know how to use your money...
•Use Task Reminders: Sometimes we might spend our money on things we think are relevant but are actually extraneous, so it's wise to use task reminders for those unavoidable expenses, so that you would be able to know if the money is been wasted.
Set a reminder for your unavoidable expenses with time and date that expense needs to be made, so once your salary comes in you'll be reminded of things that you need to do first..
Tips: Always ensure that your task reminder date and time is accurate and tally with how your salary comes in.
Sometimes unnecessary things may eat up our income so I advise anyone serious about life to create a budget.
•Create Budget: A Simpe definition of budget can be found on the English Mini of my smartphone, which goes like this:
The amount of money or resources earmarked for a particular institution, activity or time-frame.
So in my own terms, A budget is actually the amount of money you decide to keep aside to get a particular thing done and this is done after much estimate or assumption with hope or assurance that it will be enough for getting that thing done.
A simple budget may look similar to what I have below:
MONTHLY INCOME: $3,000
BUDGETS
Groceries: $300
Dining out: $125
Gas: $100
Emergency medical: $200
Discretionary: $400
Buying A Refrigerator: $500
Monthly Savings: $900
This article indirectly covers most aspect of budget, so I won't be stressing on how to create budget again, I have also written an article which focuses on creating budget alone, so you can read it here.
For a better budgeting, i recommend you use this online budgeting tool called Mint, and have a better budget!
•Be Honest With Your Budget: It's your money right? Yeah it's, so why lie to your self? If you know what you're budgeting is too much you and might affect you, don't hesitate to reshape your budget to suit you perfectly..
If you ain't honest, you'll be doing your self more harm than Good.
•Keep Track Of Your Budget: Learn to always revisit your budget list and re-budget, don't be too comfortable or satisfied with your budget, always make changes..
WHY YOU NEED TO DO THIS?
Find A Cheaper Product: Sometimes you might find something cheaper and would want to make some budget changes in order to save more money.
Irrelevant: Sometimes we might discover what we are budgeting for has become irrelevant, so you'll need to make changes.
Decrement: Sometimes what we are bugeting for might have receive some changes in terms of price which may be either on the decreasing or increasing side.
If it has increase then you'll need to channel more fund to it or discard if you can't afford or even look for something cheaper.
If it has decreased in price then you'll be removing funds from it and channeling in order other sectors like your emergency funds, savings accounts or meet a particular need.
•Cut Unnecessary Spendings Ruthlessly: There some expenses we make that are extraneous or irrelevant, so when discover that you're spending unnecessary, don't wait, cut them down. Always look at your tracked spendings and see what can be removed from the list. This is a good approach to managing money better.
4.WRITE DOWN BIG EXPENSES THAT NEEDS TO BE MADE.
There some big expenses or rather long term goals that you want to accomplish but don't have the resources to do so.
The best step to achieving this is to write a list of them, of course it won't be only one, so write a huge list as possible.
•Pick The Most Crucial And Urgent, Save For It: The next steps is comparing the list you've written and see which is more important than the other then start saving to purchase whatever it may be.
You can ask trusted friend, family or wife/husband, what they think you need most from the list you've written, it's advisable to cut off the less crucial to some extent before seeking for a third party opinion.
Note: this may not be necessary in some case, but will be essential if you're finding difficultly in picking the most crucial ones. Also learn to relay things like this to someone that's tested and trusted.
•Wait On Big Expenses That Isn't Crucial Or Urgent: There are some things that is crucial but not that urgent, so you should wait on things like that, you can get them done when you've accomplished the urgent ones.
Making big purchases can sometimes be risky, you might end up discovering you wasted money for it as it isn't what you expected or you no longer see the value, yes things like this happens. So there need to be serious analysis and mind-work before buying anything big or even small.
You should consider asking yourself questions like:
••°°••Can I afford it?
••°°••What else could I spend this amount of money on?
••°°••Can the large purchase wait 24 hours?
••°°••How often will I use this?
••°°••Can I borrow the item from someone instead of buying it?
••°°••Is there a return policy?
••°°••Do I actually need this?
5.SPEND LESS THAN WHAT YOU EARN.
This is one Golden rule of personal finance, you should never spend more than what you earn, if you do then debt will be your next best friend.😃
Endeavor to spend less than what you earn, don't even spend exactly what you earn except you're comfortable with living a Paycheck-Paycheck lifestyle which am sure you won't be comfortable with.
If you earn $30,000/year and you spend $31,000/year, you’ll end up in a spiral of debt that’s hard to walk away from. If you spend exactly the amount earned, you’ll never be prepared for emergencies or major life changes. Spending less than you earn allows' you the freedom to save, to prepare for the future, and deal with the inevitable crises that life throws at you. The bigger
the gap between your income and your spending , the better.
6.PLAN ON SAVING AND INVESTING YOUR MONEY.
It's always nice to save money because you don't know what life may throw at you. In order to manage your money, I'll advise you learn how to save your money, at least 15-20% of your income.
While saving is good it's not actually the best approach towards getting rich, there's something greater the rich people do to get even more richer, which is making their money make more money even while sleeping..
If you don't let how to make money while sleeping, you'll work all the days of your life.
This making your money make more money is in other words called investment, before I delve into investment aspect, I want you to get something right...
I'm not saying you shouldn't save your money, why would I? But sometimes it's better to invest than saving, it could be vice versa as the case maybe.
Personally, I would advise you save your money if you'll be needing it for short term goals, but whichever way, learn to invest a little because it will help you a lot..
If you're planning on a long term goal, please invest your money.
•Make it Automatic: You should consider making your savings or investment funds automatic, they should be deducted once your salary arrives...
Another smart way to save is to use Digit, this is a smartphone App that allows you to automate your savings or investment funds, this App allows you to connect your bank account and get your savings transferred to your Digit saving account. I talked about Digit and some other Apps that helps you save money in this my article, you might like to check it out and see other Apps designed to help you save money or practice frugality.
•Avoid Gambling: Avoid using your money for try-your-luck games, things you doubt if it will be productive, don't invest in such thing as they may eat up your money without even generating a dime.
7. AVOID OVERSPENDING.
One way to manage your money is to avoid spending on unnecessary things, this are often referred to by many people as ENJOYMENT/FUN.
This fun isn't relevant at all, why? Because it's consumes money more than we think, if you track your daily spendings, do it for one month and see how much you've been spending on irrelevant things I.e chewing gum, etc.
There's this natural impulse that make us spend too much but learning how to control yourself will be better, I advise you don't create unrealistic budget that's too strict and tight, at least have some free spending, if you don't; you'll be forced to touch your saving or budgeted fund. At the same time, you should develop the habit of not touching your savings or budgeted funds for any reasons. When creating budget, create it comfortably, always remember it's your money and if you're unrealistic with it, you'll be cheating on yourself..
There are many ways to avoid overspending some may include:
•Eat At Home: This tactics may work when you're going to work, party, traveling, etc. When you eat at home before embarking on any of the aforementioned activities, you'll be opportune to spend less on snacks and other foodstuff. So learn to eat at home when going out, if you won't be able to eat at home then consider taking your food along, maybe to work. This will save you money as eating out can be so expensive.
•Have A List Of Coupon Or Promo codes: Using coupons will help you purchase things at a frugal price but this can be so tempting as you may be coerced to buy unnecessary things just because it's cheaper than the actual value, many people have fall into this and end up wasting money on things they never really wanted.
Now, how can you escape this impulse? Good question. Avoid buying unnecessary things because it's cheap, you should only buy things you'd buy if you didn't have any coupon, this shows the importance of the thing you're buying, don't buy because it's cheap with the coupon but because you need it and would buy even without the coupon or promo code.
If you are really serious about slashing your grocery bill, here are some web sites that can help you find good deals:
coupons.com
couponsuzy.com
thegrocerycame.com
To organize your coupons, consider purchasing the CouponPro binder with coupon pocket pages, divider, shoulder strap, and built-in storage compartments.
You can also read my money saving Apps article, where I mentioned an App that Autogenerate coupons when shopping online.
•Buy In Bulk: This is another tactics to spend less and save more money, you should buy in bulk if it worth it.
To know which product you should buy in bulk, consider buying those products you use regularly and is also important, when you buy it in piece, you might spend much money but buying in bulk will help you save more money.
One example of thing I always buy in bulk is Shaving stick, I buy it in bulk because I need it regularly and might not be chanced to purchase it piece by piece, so I buy in bulk. This don't only save me money but time also.
Today's task, think of what you should buy in bulk.
What else are you buying in bulk? Say it in comment for me and others to learn..
•From Your Budget, Still Spend Less: Sometimes we budget too much for something, and this things isn't a good measure to managing money.
You should spend less on your budget when applicable, this is when frugality comes to play.
For example, you budget $300 for gas, you should think or rather search if there's any way you can buy that gas for $280 or even less. The remains can be channel to other sector. That's why you should be honest with your budget and know if you're budgeting too much or even budgeting for extraneous things.
•When you can borrower/rent, don't buy: I learnt people usually spend money to buy things they won't use or use once or twice, this are kind of stuff that could be rented or even borrowed.
If you're serious about managing money, you shouldn't buy everything especially when those things can be rented or borrowed.
Some other proactive steps to spending less is written in my 36 habits that will help you save more money, you should consider reading it.
8. HAVE YOUR FREE SPENDINGS.
The best way to avoid going extra miles by using budgeted funds or savings is to have a free spending, it's nice to keep out a free spending after all arithmetics attached to budgeting.
This will help you spend without having any guilt and will help you avoid using funds meant for something else.
This free spending can be for Dining out, drinking, or splurging on entertainment is often seen as a financial vice, but the truth is, we do these things because we enjoy them.
As long you've done the necessity like Tracking fixed expenses (expenses that can't be avoided), saving (At least 5 - 10% but the more money you channel into saving the better), investment (this should be 10% or more), etc you can spend you free spending without feeling guilty about your budget.
9. ALWAYS KEEP TRACK OF YOUR CURRENT NET WORTH.
This is what makes you productive, you should know if you're ranking Negative or Positive financially. This will also help you budget and use money wisely.
You can determine your net worth by subtracting debts, taxes and other mandated fees from your the total money you have. If you're doing it on a monthly basis, you should subtract the debt you owe on that particular month, taxes of that month and other mandated payment for that month. Same thing applies if you're calculating weekly, daily, or yearly but the more often the better.
If you're are having money left after the arithmetics then you're on the positive side but if your income isn't enough to settle the necessary payment or expenses, thereby giving you a minus(-) sign then you're on the negative side, which isn't healthy!
However, you should always stay positive and learn to check your net worth always. If you're on the negative side, do all things possible to get back to your stand.
BONUS POINT
Shopping Guide: Shopping is good for everyone but it's better when you're shopping for the right purposes and doing it meticulously, shopping can be very dangerous when we ain't doing it right and could lead to financial downturn if not carefully managed. I want to list a summary guide for shopping that will help you manage your money better and proficiently.
•Stop unnecessary shopping: I'm not talking about relevant shopping you do but those you do for no reasons like Strolling around a mall to see if you can purchase a thing, visiting online shopping platform with no actual thing (in mind) you want to purchase, shopping because you have the money or for mere fantasies.
I'm not suggesting that you never buy anything again, but that your spending should become a planned act, purchasing the goods and services you need, not spur-of-the-moment, impulsive spending.
•Pay With Cash: When shopping with credit card, debit card, or checkbook, you'll or might be impulsed to spend too much as you won't be able to resist the amazing and eye-catching goods in the shop and might end up purchasing a whole lot of things you never planned for, which at times can be irrelevant.
I'm not saying you shouldn't shop new things, but you should take painstaking measure when doing so.
The best approach to this is planning before going for shopping; get a list of things you'll like, love and need to purchase then do an estimate of how much it will cost, get the cash and head for shopping, leaving your credit card, debit card, or checkbook at home.
This will help you finish shopping on time and get only the necessity. If you find something that Worth trying, include it in your list when next you'll be shopping.
•Do More Online: This days, online shopping tends to be the best for many people out there, because it helps save more money.
Using online platforms for your shopping, you won't need to worry of transportation and time taken, as everything will be delivered just at your door step. Besides online store tends to be cheaper as there are tons of coupons and most times it's naturally cheap even without the coupon. If you haven't be shopping online then start today, using sites like Amazon, Konga, Jumia, Alibaba, and more of its kind.
FINAL THOUGHTS
Avoid visiting malls, disconnect your cards; debit or credit from online stores, always use coupon when you can!
Emergency: In order to utilize your money you should have a separate fund for emergencies like health issues, car break down, etc.
Believe it or not, emergencies will always arrive, though there isn't any fixed amount that could be enough for solving emergencies but I think you should have a little for it, as it's widely said "something is better than nothing", so learn to always keep a little for emergencies, no matter how little, It will have a meaningful impact.
Know How Much You Owe: it's good to keep a list of your debt and work towards eliminating them.
You probably can't save or invest when you still have uncleared debts, clearing your debts should be your priority.
I'm not suggesting you channel all your income into clearing debts, make sure you have a clear plan on how to eliminate your debt.
Some will advise you clear the big debt first while others will advise you clear the small debts first, so it's up to; use whichever formula you're comfortable with, just make sure you're eliminating debts.
Lastly, develop the habit of paying debts on time, don't or rather never allow your debt to pile up before you think of clearing it. Clear it as soon as you can. This may include student loans, credit card debts, mortgage, etc.
Read/listen to Financial Books Or Podcast: Be financially literate if you desire to be rich.
If you want to be more productive financially, then learn to read or listen to financial sermon or tutorial, read books on making, managing and multiplying money.
Reading/Listening to books or podcast will build you towards being a financial savvy.
Below I have some books you should consider reading; this books are highly equipped towards helping you financially..
1.31 Days To Radically Reduce Your Expenses.
2.The Broke And Beautiful Life.
3.You Only Live Once.
4.One Bed, One Bank Account.
5.The Recovery Splender: How To Live A Happy, Fulfilled, Debt-Free Life.
In conclusion, use this tips regularly to strengthen your financial life, also don't forget the golden rules of personal finance like spending less than you earn, saving and investing.
Also, endeavor adding value to this article in any way you can, whether it's sharing, leaving quality comments and more! Don't forget to subscribe and pin article!
Managing money is a crucial aspect of life, most times people get it wrong and end up overspending without saving even a cent. Some even run into debt which may include credit card debts, loan and borrowed funds.
Everyone wants to leave a debt free life and still maintain a healthy lifestyle, it won't be nice to starve because you're managing your money, so i will unveil some ways to manage your money without selling your soul.
In this write up I will be discussing some basic rule for money, like; Planning for the future, saving, having emergency funds, having guilt free spending, maximizing your budget and many more!
Before I delve deeply, I will like to list some of the importance of managing your money, which are as follows:
Increased Productivity: One of the benefits of managing money is the increase of productivity and of course everyone wants to be more productive, you won't be productive when don't have accurate monetary plan as you may run into debt, have no fund for emergencies, no savings which you will need in your nearest future.
Eliminating Or Avoiding Debt: when you manage your money, you'll be debt free or can easing pay off current debt like student loans, borrowed funds, and mortgage, just to mention but few.
Establishing Emergency Fund: Managing your money will help you control emergencies which comes when we least expect, which may include car break down, lost of love ones, medical bills, and more!
Helps You Save More: when you make good use of money, you'll have enough in your savings wallet and this savings can be useful in diverse ways like vacation, purchasing your long term goal, shopping and more!
Having List some key benefits of managing your, lets look at the topic for the day. Note, you can add some more benefits in the comment area.
In this money management article, I will only cover some basic aspects of managing money but will provide you some resources to enhance your money management skills. This article might be a bit so long, so endeavor to pin it and browse later. If you're ready to read then grab some chips and an Ice cream as we ride together.
The 9 Suberb Ways To Healthily Manage Your Money.
1. NOTE YOUR NET INCOME.
Net income is the amount of money you have left after all necessary deduction have been made, this may be Health Care and Taxes.
When calculating your Net Income, ensure you include other sources of income if applicable, this extra income maybe tips, monthly bonuses, cost of living increases, dividends, interest income, side hustle, 401(k), social security etc. It's easy to overestimate your Net income, so always make all necessary deduction and see what you have left...
If you're a freelancer and don't have a fixed monthly income, you can Determine all your essential, priority and lifestyle expenses first. Then, with your paycheck, start paying off all your essential needs first, followed by your priority and then lifestyle expenses. The money you have left over can either be set aside for an emergency account or stashed away into savings.
It's also recommended that those who don't have a fixed income should use their average monthly income of the last six month...
2.TRACK YOUR SPENDINGS.
It's wise to know which area your money is being channelled into, so you'll be able to make adjustments if you feel a sector is eating too much money. One reason most people fail when it comes to tracking expenses is not tracking even the red cent spending. Yeah, you should track every spending you make, you may think it's small but when you add those spending up you'll be amused with how much you've been spending. So don't overlook that red cent spending, Never!
A good approach to tracking your spending is first putting down or tracking your fixed expenses such as rent or mortgage, utilities or car payments. It’s unlikely you’ll be able to cut back on these, but knowing how much of your monthly income they eat up can be helpful.
The Next Step is to list all your variable expenses, those the aren't fixed and may change from month-month such as groceries, gas, and entertainment, etc.
One thing about variable expenses is it can either increase or decrease, sometime remain fixed for a short time, so this sometimes might be a great opportunity especially when the price decrease as you can channel what's left to your savings or emergency funds or even add to your investment.
Also, Credit card and bank statements are a good place to start since they often itemize or categorize your monthly expenditures.
Lastly, Record your daily spending with anything that’s handy—a pen and paper, a Note App on your smartphone.
3.WRITE DOWN UNAVOIDABLE EXPENSES.
I think I've said a little on this but it Worths stressing more on.
In order to manage your money well you should write down expenses that are so crucial and can't for any reason be avoided. Doing will help you know how to use your money...
•Use Task Reminders: Sometimes we might spend our money on things we think are relevant but are actually extraneous, so it's wise to use task reminders for those unavoidable expenses, so that you would be able to know if the money is been wasted.
Set a reminder for your unavoidable expenses with time and date that expense needs to be made, so once your salary comes in you'll be reminded of things that you need to do first..
Tips: Always ensure that your task reminder date and time is accurate and tally with how your salary comes in.
Sometimes unnecessary things may eat up our income so I advise anyone serious about life to create a budget.
•Create Budget: A Simpe definition of budget can be found on the English Mini of my smartphone, which goes like this:
The amount of money or resources earmarked for a particular institution, activity or time-frame.
So in my own terms, A budget is actually the amount of money you decide to keep aside to get a particular thing done and this is done after much estimate or assumption with hope or assurance that it will be enough for getting that thing done.
A simple budget may look similar to what I have below:
MONTHLY INCOME: $3,000
BUDGETS
Groceries: $300
Dining out: $125
Gas: $100
Emergency medical: $200
Discretionary: $400
Buying A Refrigerator: $500
Monthly Savings: $900
This article indirectly covers most aspect of budget, so I won't be stressing on how to create budget again, I have also written an article which focuses on creating budget alone, so you can read it here.
For a better budgeting, i recommend you use this online budgeting tool called Mint, and have a better budget!
•Be Honest With Your Budget: It's your money right? Yeah it's, so why lie to your self? If you know what you're budgeting is too much you and might affect you, don't hesitate to reshape your budget to suit you perfectly..
If you ain't honest, you'll be doing your self more harm than Good.
•Keep Track Of Your Budget: Learn to always revisit your budget list and re-budget, don't be too comfortable or satisfied with your budget, always make changes..
WHY YOU NEED TO DO THIS?
Find A Cheaper Product: Sometimes you might find something cheaper and would want to make some budget changes in order to save more money.
Irrelevant: Sometimes we might discover what we are budgeting for has become irrelevant, so you'll need to make changes.
Decrement: Sometimes what we are bugeting for might have receive some changes in terms of price which may be either on the decreasing or increasing side.
If it has increase then you'll need to channel more fund to it or discard if you can't afford or even look for something cheaper.
If it has decreased in price then you'll be removing funds from it and channeling in order other sectors like your emergency funds, savings accounts or meet a particular need.
•Cut Unnecessary Spendings Ruthlessly: There some expenses we make that are extraneous or irrelevant, so when discover that you're spending unnecessary, don't wait, cut them down. Always look at your tracked spendings and see what can be removed from the list. This is a good approach to managing money better.
4.WRITE DOWN BIG EXPENSES THAT NEEDS TO BE MADE.
There some big expenses or rather long term goals that you want to accomplish but don't have the resources to do so.
The best step to achieving this is to write a list of them, of course it won't be only one, so write a huge list as possible.
•Pick The Most Crucial And Urgent, Save For It: The next steps is comparing the list you've written and see which is more important than the other then start saving to purchase whatever it may be.
You can ask trusted friend, family or wife/husband, what they think you need most from the list you've written, it's advisable to cut off the less crucial to some extent before seeking for a third party opinion.
Note: this may not be necessary in some case, but will be essential if you're finding difficultly in picking the most crucial ones. Also learn to relay things like this to someone that's tested and trusted.
•Wait On Big Expenses That Isn't Crucial Or Urgent: There are some things that is crucial but not that urgent, so you should wait on things like that, you can get them done when you've accomplished the urgent ones.
Making big purchases can sometimes be risky, you might end up discovering you wasted money for it as it isn't what you expected or you no longer see the value, yes things like this happens. So there need to be serious analysis and mind-work before buying anything big or even small.
You should consider asking yourself questions like:
••°°••Can I afford it?
••°°••What else could I spend this amount of money on?
••°°••Can the large purchase wait 24 hours?
••°°••How often will I use this?
••°°••Can I borrow the item from someone instead of buying it?
••°°••Is there a return policy?
••°°••Do I actually need this?
5.SPEND LESS THAN WHAT YOU EARN.
This is one Golden rule of personal finance, you should never spend more than what you earn, if you do then debt will be your next best friend.😃
Endeavor to spend less than what you earn, don't even spend exactly what you earn except you're comfortable with living a Paycheck-Paycheck lifestyle which am sure you won't be comfortable with.
If you earn $30,000/year and you spend $31,000/year, you’ll end up in a spiral of debt that’s hard to walk away from. If you spend exactly the amount earned, you’ll never be prepared for emergencies or major life changes. Spending less than you earn allows' you the freedom to save, to prepare for the future, and deal with the inevitable crises that life throws at you. The bigger
the gap between your income and your spending , the better.
6.PLAN ON SAVING AND INVESTING YOUR MONEY.
It's always nice to save money because you don't know what life may throw at you. In order to manage your money, I'll advise you learn how to save your money, at least 15-20% of your income.
While saving is good it's not actually the best approach towards getting rich, there's something greater the rich people do to get even more richer, which is making their money make more money even while sleeping..
If you don't let how to make money while sleeping, you'll work all the days of your life.
This making your money make more money is in other words called investment, before I delve into investment aspect, I want you to get something right...
I'm not saying you shouldn't save your money, why would I? But sometimes it's better to invest than saving, it could be vice versa as the case maybe.
Personally, I would advise you save your money if you'll be needing it for short term goals, but whichever way, learn to invest a little because it will help you a lot..
If you're planning on a long term goal, please invest your money.
•Make it Automatic: You should consider making your savings or investment funds automatic, they should be deducted once your salary arrives...
Another smart way to save is to use Digit, this is a smartphone App that allows you to automate your savings or investment funds, this App allows you to connect your bank account and get your savings transferred to your Digit saving account. I talked about Digit and some other Apps that helps you save money in this my article, you might like to check it out and see other Apps designed to help you save money or practice frugality.
•Avoid Gambling: Avoid using your money for try-your-luck games, things you doubt if it will be productive, don't invest in such thing as they may eat up your money without even generating a dime.
7. AVOID OVERSPENDING.
One way to manage your money is to avoid spending on unnecessary things, this are often referred to by many people as ENJOYMENT/FUN.
This fun isn't relevant at all, why? Because it's consumes money more than we think, if you track your daily spendings, do it for one month and see how much you've been spending on irrelevant things I.e chewing gum, etc.
There's this natural impulse that make us spend too much but learning how to control yourself will be better, I advise you don't create unrealistic budget that's too strict and tight, at least have some free spending, if you don't; you'll be forced to touch your saving or budgeted fund. At the same time, you should develop the habit of not touching your savings or budgeted funds for any reasons. When creating budget, create it comfortably, always remember it's your money and if you're unrealistic with it, you'll be cheating on yourself..
There are many ways to avoid overspending some may include:
•Eat At Home: This tactics may work when you're going to work, party, traveling, etc. When you eat at home before embarking on any of the aforementioned activities, you'll be opportune to spend less on snacks and other foodstuff. So learn to eat at home when going out, if you won't be able to eat at home then consider taking your food along, maybe to work. This will save you money as eating out can be so expensive.
•Have A List Of Coupon Or Promo codes: Using coupons will help you purchase things at a frugal price but this can be so tempting as you may be coerced to buy unnecessary things just because it's cheaper than the actual value, many people have fall into this and end up wasting money on things they never really wanted.
Now, how can you escape this impulse? Good question. Avoid buying unnecessary things because it's cheap, you should only buy things you'd buy if you didn't have any coupon, this shows the importance of the thing you're buying, don't buy because it's cheap with the coupon but because you need it and would buy even without the coupon or promo code.
If you are really serious about slashing your grocery bill, here are some web sites that can help you find good deals:
coupons.com
couponsuzy.com
thegrocerycame.com
To organize your coupons, consider purchasing the CouponPro binder with coupon pocket pages, divider, shoulder strap, and built-in storage compartments.
You can also read my money saving Apps article, where I mentioned an App that Autogenerate coupons when shopping online.
•Buy In Bulk: This is another tactics to spend less and save more money, you should buy in bulk if it worth it.
To know which product you should buy in bulk, consider buying those products you use regularly and is also important, when you buy it in piece, you might spend much money but buying in bulk will help you save more money.
One example of thing I always buy in bulk is Shaving stick, I buy it in bulk because I need it regularly and might not be chanced to purchase it piece by piece, so I buy in bulk. This don't only save me money but time also.
Today's task, think of what you should buy in bulk.
What else are you buying in bulk? Say it in comment for me and others to learn..
•From Your Budget, Still Spend Less: Sometimes we budget too much for something, and this things isn't a good measure to managing money.
You should spend less on your budget when applicable, this is when frugality comes to play.
For example, you budget $300 for gas, you should think or rather search if there's any way you can buy that gas for $280 or even less. The remains can be channel to other sector. That's why you should be honest with your budget and know if you're budgeting too much or even budgeting for extraneous things.
•When you can borrower/rent, don't buy: I learnt people usually spend money to buy things they won't use or use once or twice, this are kind of stuff that could be rented or even borrowed.
If you're serious about managing money, you shouldn't buy everything especially when those things can be rented or borrowed.
Some other proactive steps to spending less is written in my 36 habits that will help you save more money, you should consider reading it.
8. HAVE YOUR FREE SPENDINGS.
The best way to avoid going extra miles by using budgeted funds or savings is to have a free spending, it's nice to keep out a free spending after all arithmetics attached to budgeting.
This will help you spend without having any guilt and will help you avoid using funds meant for something else.
This free spending can be for Dining out, drinking, or splurging on entertainment is often seen as a financial vice, but the truth is, we do these things because we enjoy them.
As long you've done the necessity like Tracking fixed expenses (expenses that can't be avoided), saving (At least 5 - 10% but the more money you channel into saving the better), investment (this should be 10% or more), etc you can spend you free spending without feeling guilty about your budget.
9. ALWAYS KEEP TRACK OF YOUR CURRENT NET WORTH.
This is what makes you productive, you should know if you're ranking Negative or Positive financially. This will also help you budget and use money wisely.
You can determine your net worth by subtracting debts, taxes and other mandated fees from your the total money you have. If you're doing it on a monthly basis, you should subtract the debt you owe on that particular month, taxes of that month and other mandated payment for that month. Same thing applies if you're calculating weekly, daily, or yearly but the more often the better.
If you're are having money left after the arithmetics then you're on the positive side but if your income isn't enough to settle the necessary payment or expenses, thereby giving you a minus(-) sign then you're on the negative side, which isn't healthy!
However, you should always stay positive and learn to check your net worth always. If you're on the negative side, do all things possible to get back to your stand.
BONUS POINT
Shopping Guide: Shopping is good for everyone but it's better when you're shopping for the right purposes and doing it meticulously, shopping can be very dangerous when we ain't doing it right and could lead to financial downturn if not carefully managed. I want to list a summary guide for shopping that will help you manage your money better and proficiently.
•Stop unnecessary shopping: I'm not talking about relevant shopping you do but those you do for no reasons like Strolling around a mall to see if you can purchase a thing, visiting online shopping platform with no actual thing (in mind) you want to purchase, shopping because you have the money or for mere fantasies.
I'm not suggesting that you never buy anything again, but that your spending should become a planned act, purchasing the goods and services you need, not spur-of-the-moment, impulsive spending.
•Pay With Cash: When shopping with credit card, debit card, or checkbook, you'll or might be impulsed to spend too much as you won't be able to resist the amazing and eye-catching goods in the shop and might end up purchasing a whole lot of things you never planned for, which at times can be irrelevant.
I'm not saying you shouldn't shop new things, but you should take painstaking measure when doing so.
The best approach to this is planning before going for shopping; get a list of things you'll like, love and need to purchase then do an estimate of how much it will cost, get the cash and head for shopping, leaving your credit card, debit card, or checkbook at home.
This will help you finish shopping on time and get only the necessity. If you find something that Worth trying, include it in your list when next you'll be shopping.
•Do More Online: This days, online shopping tends to be the best for many people out there, because it helps save more money.
Using online platforms for your shopping, you won't need to worry of transportation and time taken, as everything will be delivered just at your door step. Besides online store tends to be cheaper as there are tons of coupons and most times it's naturally cheap even without the coupon. If you haven't be shopping online then start today, using sites like Amazon, Konga, Jumia, Alibaba, and more of its kind.
FINAL THOUGHTS
Avoid visiting malls, disconnect your cards; debit or credit from online stores, always use coupon when you can!
Emergency: In order to utilize your money you should have a separate fund for emergencies like health issues, car break down, etc.
Believe it or not, emergencies will always arrive, though there isn't any fixed amount that could be enough for solving emergencies but I think you should have a little for it, as it's widely said "something is better than nothing", so learn to always keep a little for emergencies, no matter how little, It will have a meaningful impact.
Know How Much You Owe: it's good to keep a list of your debt and work towards eliminating them.
You probably can't save or invest when you still have uncleared debts, clearing your debts should be your priority.
I'm not suggesting you channel all your income into clearing debts, make sure you have a clear plan on how to eliminate your debt.
Some will advise you clear the big debt first while others will advise you clear the small debts first, so it's up to; use whichever formula you're comfortable with, just make sure you're eliminating debts.
Lastly, develop the habit of paying debts on time, don't or rather never allow your debt to pile up before you think of clearing it. Clear it as soon as you can. This may include student loans, credit card debts, mortgage, etc.
Read/listen to Financial Books Or Podcast: Be financially literate if you desire to be rich.
If you want to be more productive financially, then learn to read or listen to financial sermon or tutorial, read books on making, managing and multiplying money.
Reading/Listening to books or podcast will build you towards being a financial savvy.
Below I have some books you should consider reading; this books are highly equipped towards helping you financially..
1.31 Days To Radically Reduce Your Expenses.
2.The Broke And Beautiful Life.
3.You Only Live Once.
4.One Bed, One Bank Account.
5.The Recovery Splender: How To Live A Happy, Fulfilled, Debt-Free Life.
In conclusion, use this tips regularly to strengthen your financial life, also don't forget the golden rules of personal finance like spending less than you earn, saving and investing.
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