Money Saving Tips - How to Manage Money
What should you do with your hard earned cash? There are many choices we face on a daily basis that can create confusion and can point us in in a different direction at any time. There are many things that we should and shouldn't do with regards to our finances and how to manage money. Let's go through some of the more important ways to start saving and put your money where it belongs.
1. Understanding when you should stop
The issue most people face when knowing how to manage money is knowing when you should stop. This may be a somewhat 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 each part of your financial portfolio and start in another. You must understand when it is time to stop using the credit card and begin to buy with real money. These 'stops' are of vital importance to our financial success and there are many more. Every situation is unique and you need to go through some of the trouble areas in your financial life to discover where you need to stop. It could be you are paying too much for for your telephone and web service. You need to know when enough is enough and put an end to cash wasting services or purchases. The amount of money you will save if you know when to the draw the line will amaze you.
2. Eliminate Impulse Buys
All stores rely on impulse purchases more than any other item sold. They will draw you in with a great deal on several things in their flyer. You end up getting those items up but while you shop you purchase several other things that were not on the list. All of us can be sucked into the impulse buys when we go to the mall, convenience stores or the grocery store. Often times we don't know we've made an impulse buy. If you chew gum, have an issue of 'Cosmo' magazine on the coffee table or have fuzzy dice dangling from your car mirror it's likely you have made an impulse buy. We make impulse buys on an almost daily basis. Those purchases empty our wallet and savings account of a lot of cash. Here's an example of how much you can spend: If you pack of breath mints {per|each|every| week you are spending about $78 every year. Throw in one magazine each week, a Starbucks coffee every day, a chocolate bar every two weeks etc. It's not hard to do the math you'll figure out that we spend thousands of bucks each year on these items that we didn't plan on buying. If you avoid them you'll easily save thousands of dollars for your retirement plus you will know the basics of how to manage money.
3. Plan Ahead
Planning is key when dealing with your finances. If we go around without putting any thought into where our money is going there is a high likelihood that it will all be gone after a couple of weeks. They key tofor solid financial planning is planning ahead.
My Step by Step Advice:
1st: Know how much every guaranteed monthly expenses are and place aside that sum from your paycheck. Those items include electricity, cable, car payment etc.
2nd: Set aside $25 (or more) every 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 the house it will prevent you from going to the corner store to buy a loaf of bread for $4.
4th: Budget no more than 10% of your paycheck for weekly spending. If you spend that 10% by Monday then you don't get any more. Don't dip into next weeks budget and don't let last weeks budget roll over into the current week.
5th: Make a financial goal at least once a 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 $20 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 the answer to that question. Managing money isn't as hard as you think and can be easy to save for the retirement, house or vacation you've always dreamed about. You simply need to understand when enough is enough when it comes to spending. You also need to stop impulse purchases. The last thing is good financial planning. If you make an honest effort at making those 3 things happen, you will be close to knowing how to manage money better.
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