Saving Money - How To Manage Money
Money Saving Tips - How to Manage Money
What to do with all of your hard earned cash? We have plenty of choices we face on a daily basis that might create confusion as well as sway us in any given direction at any time. Plenty of those we should and shouldn't do with regards to our cash and how to manage money. Here is a list of a few of the most important ways to start saving and put your cash where it belongs.
1. Understanding when you should stop
The problem most of us face when understanding how to manage money is knowing when you should stop. This might seem like a vague statement but I'll help clear that up. Understanding when you should stop can pertain to all kinds of different parts of your finances. You should know when to prevent buying things on each day, week or month and that all comes down to budgeting. You must understand when to stop investing in one part of your financial portfolio and start in another. You must understand when to stop using your credit card and start using cash. All of these are are of vital importance to our financial success and there are many more. Every situation is unique and you should sift through what may be the trouble areas with your finances to discover where you have to stop. It could be you are paying too much for internet or phone service. You need to know when enough is enough and put an end to cash wasting services and purchases. You will save tons of money if you know when to stop and it will amaze you.
2. Eliminate Impulse Purchases
Retail outlets rely on impulse purchases more than any other item sold. They will draw you in with a great deal on several items in their flyer. You end up getting those items up but while you shop you buy several other things that aren't on the list. We're all sucked into those impulse buys any time we go to the mall, gas station or the food stores. Usually we don't even realize we've made an impulse buy. If you chew gum, have an issue of 'People' magazine on the nightstand or have fuzzy dice hanging from your car mirror chances are you've made an impulse buy. We make impulse buys every single day. Those purchases can be credited with draining our wallet and bank account of more money than we realize. Here's an example of how much you can spend: If you chew one package of gum {per|each|every| week you will spend about $78 a year. Throw in one magazine every week, a Starbucks coffee each day, a chocolate bar every two weeks etc. If you do the math you'll find out that we waste thousands of bucks every year on these things that we had no intention of buying. If you avoid them you'll easily save thousands of dollars for what's really important and you will understand the basics of how to manage money.
3. Plan Ahead
Planning is everything when dealing with your finances. If we run around without putting any thought into where our money is going there is a high likelihood that it will have disappeared after a few of weeks. They key tofor quality financial planning is to plan ahead.
Some Step by Step Advice:
1st: Know what your guaranteed monthly expenses will be and place aside that amount from your paycheck. Those items include electricity, internet, car payment etc.
2nd: Set aside $25 (or more) per week that will go into your emergency fund.
3rd: Make a meal plan and then do your weekly grocery shopping. If you have all the food you need in in your home will prevent you from going to the corner store to buy a loaf of bread for $4.
4th: Set aside weekly spending budget of no more than 10% of your paycheck. If by Tuesday you've spent it all then you don't get any more. Be sure not to dip into next weeks budget and don't let last weeks budget roll over into the current week.
5th: Create a financial goal at least once every week. If you want to go south this March, create a goal to make that dream come true. If you want to own a house next year, start making that goal happen. If you want to save an extra $10 a week, figure out a way to make it happen. This will show you how to manage money and get you on the right track to your financial freedom.
Should you go out and spend your money with reckless abandon or save wisely? I'm pretty sure you know what the answer is. Managing money isn't as hard as you think and you don't have to be the most frugal person in the world to be able to save for the golden years, house or holiday you've always dreamed about. You simply need to know when it's time to stop when it comes to spending. You also must prevent impulse purchases. The last thing is sound financial planning. If you make an honest effort at making those three things happen, you will be close to knowing how to manage money wisely.
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by: Brandon Schmid
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