Top 5 Money Management Tips
and Practices Everyone Should Know
Learning how to manage your money
effectively is one of the most valuable skills you can have.
By using the top
money management tips, you can make your money go further and even feel better
Let’s look at 5 of the Top Money
Management Tips and Practices That Will help you manage your money better and
also enhance your lifestyle.
Know What You Want
You may not have thought about this before, but the most
vital step in money management is to think about why you need money in your
This is essentially defining your relationship with money.
Although it might seem a little funny, ask yourself –“what do I even need money
Determine how you currently handle your finances, and how important money is to you.
Another key question you should answer is “What Are My
Strengths and Weaknesses with managing
money so far?”.
- For instance you may realize that often you spend more than
you need to because you are influenced by the attitudes of your peers.
- Perhaps you have no clear plan of how you will use your
money in the first place, and so you find it hard figuring out where the money
When you figure out what you are doing right and where you
need to improve, you will be able to make wise decisions when it comes to your
spending. This way, you can convert your weakness into strengths.
Set Aside Some
Saving is an important component of money management we’ve
all likely thought about at some point.
You should set aside a part of your income each month in a
savings account, which will yield interest. The amount one should save will
vary considerably based on circumstances, but you should put forth effort to
actually save the amount you plan to save each month.
This obviously requires self-discipline, but you will
certainly benefit if you set aside some of your funds.
- A practical aspect of saving is to identify long-term and
short-term goals that you would like to achieve. If you have a defined plan, it
makes it easier to save your money.
Saving is generally a wise practice, even if you aren’t 100%
sure what the funds will eventually be used for.
This is a huge aspect of managing the money you earn each month.
A budget helps you keep track of your expenses as well as figure out how to
divide your earnings.
To make a budget, here are some simple things to keep in
- Look at your sources of income and write down
your how much comes into your account each month.
- Make a row under your income for your expenses.
- Figure out your fixed expenses, the things that
you know you spend money on each month – like rent, and your water & gas
- Think about what other things you will likely
need to spend on during the month, like eating out and recreation, and write
down the estimated cost. Leave a bit of room in your budget for the unexpected.
- When you have planned out your monthly expenses,
next you can write down how much you want to save up per month.
Calculate how much money you will have at the end of the month. As
you distribute your income, you may have to adjust certain factors to make sure
both ends (income and expenses) are shared well.
These are the basic elements of an organized budget. It is
helpful to plan the above steps using a table or spreadsheet and Excel is good
Don’t Buy It Straight Away
One of the top money management tips you’ll find is to avoid
As a general rule, do not buy things straight away.
see something nice in a store, be a little patient. Many people have found it
useful to wait at least a couple of weeks- then decide if the purchase is
- Many times, we will see things out of the blue and though
shopping can be fun you will save money if you think before you buy.
- If you do not make a purchase straight away, you may be able to find and make use of a better
deal somewhere else, or even come back to the item when it has been reduced.
Two good reasons not to spend on impulse.
Spending on Impulse:
- Makes life more stressful.
- You find yourself feeling under pressure more often.
Expect the Unexpected
The final main money management tip we will discuss, is
something we have come across before:
Expect the Unexpected.
- When you budget your funds, leave room for emergency
situations and times when you will have to spend on something you aren’t aware of
- It’s important to be prepared, and money-handling experts are always mindful of possible unplanned situations that may creep up.
Thanks for reading. If you enjoyed this article on
the Top 5 Money Management Tips and Practices We All Should Know, then please feel free
What other tips would you share on managing your money
effectively? Please comment below.
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