If you are someone who spends money on several things throughout the month and ends up being completely broke by the end of the month, then this article is for you. Many people aren’t able to manage their money properly, and this is why it is important to learn how to effectively manage your money. Let’s have a look at some of the ways to manage your money in a better way.
Top 15 Ways to Manage Money in a Better Manner
1. Make a Budget
Everyone needs to prepare a budget, it could be for a month or even for a week. People usually ignore this because they do not want to go over all the numbers and stuff. But once you get into the habit of preparing a budget, soon you will realize how much it is helping you.
2. Analyse your Budget Before Spending
People spend a large amount of their money on buying extravagant things or something that they don’t even need. This is a very common mistake people commit. First of all, you have to look at your budget and analyze if you could afford to buy that thing. It will help you save money.
3. Do not Avoid Smaller Expenses
By this, we mean that you need to keep a track of your smaller expenses too. Expenses like buying snacks, paying for cabs, or anything that doesn’t concern more than 200 bucks should also be in your expense list. Small expenses add up and sometimes you end up spending thousands of money in these miscellaneous payments alone. Keeping a track of it will help you and you will not spend on such things from next time onwards.
4. Get Your Debt Under Control
The first and foremost thing you need to do is not add any more debts. It will only accumulate, and soon you will find yourself in the debt trap. Do not even consider taking any further debts without paying off previous ones.
5. Manage your Credit Card Payments
Credit card is the biggest trap into which we usually fall. We make payments through our credit cards without even realizing the amount of interest they charge us. It is the worst kind of debt, and if possible, ditch your credit cards altogether.
6. Keep Track of Your Monthly Payments
There are several things for which we spend money in a month. This includes a lot of payments that are done unnecessarily. For example, subscription to several OTT platforms, a gym membership that we don’t even go to, etc. Get rid of these things and you will end up saving a lot of money.
7. Have an Emergency Fund
The emergency fund is something that will help you in your difficult situation. Always try to save a chunk of your income in the emergency fund, and only use it when you are in dire need of it.
8. Have a Monthly Saving Goal
Apart from what you are saving every month, make a monthly saving goal for yourself too. As Warren Buffet said, “Save before you start making your budget”, it is essential to have a savings goal. Therefore, you will automatically end up saving more money and spending less money on things that you don’t require.
9. Use Price Comparison Apps and Websites
To cut your unnecessary expenses, one of the best things to do is to compare the items before buying them. There are several apps that could help you with this, and you will save a lot of money.
10. Use Personal Finance Apps
Personal finance apps can help you a lot in tracking all your expenses and savings. It is a great option for people who are hesitant to make a budget. Use these apps and your life will be much sorted.
11. Constantly Improve Your Knowledge
To become a pro in money management, you need to constantly improve your knowledge in this field. If you want, you can also join some courses which will help you in managing your money better.
12. Use Your Hobby to Bring in Extra Income
It is stupid to have just one source of income. That’s why, the easiest way to earn extra money is by utilizing your hobby. You can find thousands of jobs on the internet and apply for them to have an extra addition to your salary. Managing your money also includes earning extra so that you can save more in the long run.
13. Investment
Investing your money in proper places is the best way to make use of your money. Play safe in the beginning and avoid investing in places where there is a high risk. Slowly gain knowledge in this field, and then you can start taking small risks when you have double the amount already saved in your bank account.
14. Get Insurance
Make sure that you and your family have health insurance and life insurance plans. We live in an unpredictable world, where no one knows what happens next. Looking at 2020, no one would have thought that something like covid-19 could ever affect the world. Take this as a lesson and get insurance as soon as possible.
15. Save 10-15% for Retirement
People usually retire at the age of 60 and suddenly there is no definite source of income. In such a situation, your previous savings will help you. Make sure to have long term FDs and do some long term investments so that you can have a secure post-retirement period.
The above mentioned points are some of the effective ways to manage your money in order to live a hassle-free and debt-free life in terms of finances. Do try to incorporate these methods into your life at the earliest for a secure and better future.
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