Managing your money is an important life skill, I personally think it’s a big shame that it’s not taught in schools so that everyone leaves high school with a decent foundation in money management. Whether you’re new to managing your own money, or just wanting to make a drastic change to how you keep your cheque books in line, I hope these 4 simple tips for managing your money help you achieve your financial goals.
1. Be Realistic About Your Spendings
It can be easy to spend with little regard to how much we’re spending, or where we’re spending it. I personally love tracking my spending because I can know where my money is going, and what my biggest expenses are. If you have no idea how much money you spend on drinking, eating out, or even shopping, then it’s probably about time you sat down and audited your own spending. I have created a budget of what I can spend in each category, and use a money tracking app to ensure that I’m keeping within these boundaries. Tracking my spending also allows me to save more each month, which is important in order to reach all my other financial goals.
2. Look to Invest
One of the best ways to ensure your own financial freedom and comfortable retirement is through investment. There are a few types of investment that can be helpful to you and it may even be a good idea to spread your savings across different types of investments, to minimise risk should one industry be affected. The three main types of investment are considered to be investing in real estate, investing in stocks/mutual funds/bonds, and then of course investing in precious metals such as gold and silver. You may prefer to invest in just one type of investment, or you might prefer to spread all your savings across the board. Whatever you do, do a decent amount of research before choosing anything, whether it be a property or mutual fund.
3. Reduce Unnecessary Expenses
Cutting down on spending that doesn’t really contribute to your happiness or financial future is a big task, but it’s very worthwhile. There are plenty of jokes going around about how younger generations cannot afford properties because they’re off spending their fortunes on avocado on toast. While the situation is obviously much more complicated than that, there is some truth behind this. When else in history did we spend so much money on eating and drinking outside the home? Maybe this is a priority for you, only you can decide, but I think reducing unnecessary expenses is a wonderful way to cut down on spending so you have more money left to put into savings. Click here to learn more about different payment types, so that you can learn about how to better make transactions.
4. Set Aside Savings
Setting aside savings is extremely important. One of your first savings goals should be setting up an emergency fund that helps to give you a buffer for emergencies and when anything goes wrong. Once you’ve reached a few months expenses in your emergency fund, then you can start saving money to invest. I suggest saving at least 20% of your income, but more is better. Obviously, the actual amount you can save will depend on your financial commitments, expenses and income, but be ambitious with the amount you want to save as it will make a world of difference.
Money management is an important skill which can make or break your future. Please use these tips to keep ahead with your finances and ensure that you’re constantly moving forward.
