Top Ways To Manage Money Better
Money is made to serve the purposes of purchase, investment, and saving. But there is a bigger picture of how using money can be placed on the scale of preference than just providing ends meet. With the basic knowledge of addition and subtraction, money and the purposes it serves, can be put to proper check to prevent an event of bankruptcy.
With good financial skills, money management becomes objective of needs more than wants. There are three (3) types of demand, namely necessity, convenience, and luxury. The demand for necessity is defined by the important needs that must be gotten for survival and sustenance. These needs include food, clothing, shelter, and maybe a car. The demand for convenience is descriptive of things required to make life easier for survival and sustenance. These could be a car, electronic appliances, a bigger apartment, etc. Demand for luxury is considered a want by many, such that it is driven by the want of showing wealth and status in society. These things could be an expensive car, a luxury home, a vacation, expensive cloth.
Regardless of what the need or want could be, money management is important to stay atop financial hardships with the dynamics of the economy. Hence, a money decision either makes you have financial freedom or gets you into huge debt and consequently, financially broke.
Importance Of Money Management
Personal finances become uncontrollable without proper money management. This in turn leads to a precarious effect of overspending and paycheck-to-paycheck. Money management provides you with the better understanding and decision needed to improve your financial status.
So what are the top ways to manage money better?
Make A Budget
Planning is one of the secrets of success in life. A good plan is characterized by a clear purpose and defined goals. This is also applicable to money management, where you need to make a budget of your expenses. This is mostly important for the poor decision-makers regarding spending. Making a budget is not enough, but being keen on the value that the budgeting will bring into your life when achieved.
Work With The Budget
It is one thing for the budget to be made and it’s another thing for it to be used. Budget works by serving as a guide for your expenses at a given time. Hence, a budget becomes useless when ignored or just kept away. It is imperative to refer to it often throughout the month to help guide your spending decisions. You can also get it updated as bills are being paid and other monthly expenses are being spent.
This step is geared at having an idea of how much should be spent and recurring expenses.
Set A Limit For Impulse Buying
The net income is considered the critical part of the budget, as it stems from the money left from the subtraction of expenses from the income. After this financial calculation has been made, the net income could be used for some miscellaneous purposes, like getting entertained with fun, but to a considerable amount. This is to have the pre-informed idea of working within the budget without incurring any unrealistic debt at the end of the month.
Track Your Spending
Making purchases can be deceitful, especially low-cost purchases. Small purchases everywhere add up quickly and suck into the budget unknowingly. Therefore, you need to start tracking your expenses to have a better understanding of where they are going into. This helps you to have an inference and make decisions if the expenses in such areas are worthy of the purpose.
You can be saving receipts and writing your purchases in a book to serve as a reference to checking your expenses.
Pay The Best Prices
The show of wealth and status should be kept at bay when making purchases. There is no evil in making price comparisons when buying things. It is often advisable to compare the prices of products and services and ensure you are going for the lowest prices. This should always influence your buying decision to save more money if possible. Also, look for discounts, coupons, and cheaper alternatives.
Make Savings For Big Purchases
Big purchases usually could not be a demand of necessity: So the ability to delay gratification goes a long way in helping money management. When this is achieved, you have more time to make price comparisons and save up, rather than stacking up credit that might lead to debt and unreasonable interest rates.
Place A Limit On Credit Card Purchases
Credit cards are a poor spender’s worst enemy. Today, credit cards are used in the place of cash to make purchases. You must learn to resist the push of making an impulse purchase, especially for the things you don’t need.
Wealth and healthy financial habits can be made when you deposit money into your savings account monthly.
According to the statistics published by CreditDonkey, 29.2% of Americans don’t save any of their income. This does not only play out in the United States, in most countries of the world. However, you can even decide to ensure the money is automatically transferred from your current account to your savings account. This helps you peradventure you forgot to do that in a certain month.
In the beginning, you might not be used to this culture of managing money, but the more you become habitual of these practices, the easier it is to manage your money, and the better off your finances will be.
However, you can improve your money management with Mint Digital Bank through its MyMintApp. With a designed feature to manage your money, you can easily track your expenses and manage your income to stay afloat in financial freedom.
To get started, download MyMintApp on Google Play Store and Apple Store. Sign up and start managing your money at no hidden charges.