In my experience, making the effort and taking the time to plan and manage your money responsibly pays off. Too many millennials (and people in general) simply go with the flow when it comes to money management and they get painfully surprised when the unexpected happens or simply when they need the money. When you are in charge of your money, you keep track of your bills and their payments, you plan your savings appropriately and you work to get closer to your financial goals. Money that is well managed is a benefit.
The question often is where to start, or simply put what the basics are. I can guarantee you that there is no secret and you are well aware of what you need to do. However, the challenge is in the application. So, as a reminder, here are some of the best ways that you can manage your money, so that you can reach your goals, stick to them, and save.
Setting a Budget
One of the first things that you need to think about, when it comes to taking control of your finances and getting you to where you want to be, is creating and setting up a budget. It is a task that won’t take too much time to accomplish and it is of the simplest steps to take towards good money management. A budget is simply a listing of your income and your expenses as well as your savings. Believe it or not, some individuals don’t even know how much debt they’re paying every month between all their credit cards, loans, etc. Being so careless leads to dealing with debt collection services. You are more likely to have savings to cover unexpected costs when you budget and are more likely to have a better credit rating as a result. Consequently, you are more likely to qualify for loans or good mortgage rates when the time comes. Essentially, establishing a budget is a must.
Getting Your Budget on Track
If you are spending more money than you have money coming in, there is obviously an issue and the next step is to evaluate and choose where you can cut back. In many cases, it may mean to start looking for a better paying job. So having things like receipts and checking your bank statements regularly can be a great way to see where your spending goes. Is your lunch digging a hole in your bank account every month? As a solution, it could be that it’s time to wake up a bit early and back a lunch instead of running to the office cafeteria or to the restaurant down the street. Are there other unnecessary expenses in your habits? It’s time to shred them.
Flexibility and Anticipation
We all know that life is unpredictable and different unexpected events or emergencies can crop up from time to time. So, try to review your budget every now and then and prioritize savings. That is a non-negotiable. Every time you get a pay raise for example, your budget needs a makeover. When more money is coming in, consider reevaluate your debt payments and how much you save.