We all wish that we had more money. It can often feel like no matter how hard we try we just can’t ever seem to earn and save enough money to live the life of our dreams. Managing our money and keeping on top of our finances can often feel like some kind of mystical skill, something that some people are just able to do while the rest of us struggle endlessly.
The good news is that managing your money effectively is a skill that any of us can learn, as long as you are motivated and willing to commit to exercising the necessary self-discipline, then taking control of your financial situation is remarkably simple.
In this article we have collected a number of the most useful tips for managing money. Regardless of your individual situation, these simple tips make taking care of your money simple so that anyone can do it.
Make a Budget
Efficient financial planning is mostly a case of just that, planning. Setting yourself a budget is the first step of formulating a viable long-term plan for looking after your money. In order to calculate your budget, you will need to sit down and calculate your exact (or as exact as you can make them) incoming and outgoing cash flow.
When putting your budget together it is crucial that you set yourself realistic saving goals which you are capable of achieving. If you set yourself unrealistic budget goals, then you are setting yourself up for failure and you will quickly lose motivation.
Review Your Expenses
This will form a part of your budgeting and is one of the most important stages of the whole process. Expenses encapsulates any areas where you are spending money, even if you are making a net gain. For example, if you operate a small home business selling arts and crafts then the money you spend on materials is an expense, even if you are making more money selling the pieces than you are spending on producing them.
Expenses also includes the everyday things that we spend our money on, our service subscriptions and food bills for example. It’s easy to forget about these expenditures over time, especially if they are only relatively minor ones. Unfortunately, cancelling subscriptions isn’t always as straightforward as most of us would like, however you should be able to find guides online, such as this one from Technology Dreamer detailing how to cancel a Planet Fitness membership.
Separate Needs from Wants
This one is a little trickier than it sounds. In theory it should be easy to differentiate between things that we need and things that we want. In practice however, the lines are sometimes blurred, for example, we obviously need food but the exact food the we buy is entirely up to us.
Next time you’re out grocery shopping, keep hold of your receipt. You can then look at each item that you have purchased and organize them in to groups of what you need and what you want.
By following these simple tips, you can be well on your way to reducing your expenditures and ensuring that the money you do make is able to stretch as far as possible.