Let’s kick this post off on the right foot: when it comes to managing money, there are no one-size-fits-all solutions. However, there’s always room for improvement. If you’re not overly confident with your money management skills, know that there is always time to learn the basics that will lead to a happy and healthy financial life.
You probably have a broad understanding of things you should be doing, like saving for retirement, making sure you have an emergency fund, and keeping an eye on your credit score. While these sound like foregone conclusions, it’s not always clear how to get there.
Here are some tips to help you figure out some strategies around budgeting, saving, and managing money that will work for you.
Money Management for Everyone
First things first: if you don’t have a budget, you need one. It’s the only way to know where your money should be going (and to find out where it actually is going if you always seem to have an empty bank account). There are plenty of templates online to help you create a budget, and even apps that make the process a breeze if you’ve never created a budget before.
Even with a budget, it’s easy to ignore it. Automating your money makes it easier to control spending as you adjust to working within a budget. This might mean opening another bank account, solely for your *fun* spending, and leaving the other solely for bills. Have part of your paycheck direct deposit go into a high-interest savings account where you can forget about it and let it grow. Lifehacker has one example of how to automate payments for optimal efficiency.
The power of compounding interest is compelling. The earlier you start saving, the more you stand to make just by letting your money sit in an account/becoming comfortable with investing. There’s a reason that Warren Buffet calls not saving early the biggest money mistake people make. Know that it’s never too late to start saving. Find a system isn’t too taxing on your finances, and when you have a little extra, sock it away.
Plan and Prepare
One of the worst financial situations in which to find yourself is when you can’t afford payments. This has massive effects on different areas of your credit, meaning that even a few months of hard luck or bad planning can have repercussions for far longer. There are different strategies to consider based on what you want to do—a basic budget might work with the 50/30/20 rule, buying a vehicle uses the 20/4/10 rule—but again, there are slight considerations for everybody.
Go Forth and Budget
Money can’t buy happiness on its own, but managing it well can bring peace of mind. Stresses over money can lead to problems—it’s usually cited as a reason for many divorces, takes a toll on our health, and more—so take matters into your own hands and find a solution that works for you.
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