No matter what we do, no matter where we are, there’s an absolute constant all around the world: money. Money makes the world go round. It’s the reason why one can do anything in public. The exchange of currency is a necessity if you want to participate in modern society, no matter where in the world you live. But most of us are horrible with money. The vast majority of us have no idea where our money is how much we have, or if we’re owed anything. On a scarier side, there are some people that don’t even know when the bills are due. If we’re reading this article, we most likely fall into the camp of people that are aware of at least some of their finances. After all, wanting to get a hold of your finances is a sign that you actually checked your accounts and arrived at the conclusion that there is some room for improvement.
Here are some tips on how to manage your money as well as rationales on why it’s so important to manage money in the first place.
Keep Track Of Small Spending
If you don’t know how much you’re spending, you won’t know how much you have left. People kind of have a main idea in their head about how much they’re spending. They know that the rent is due and that Christmas is coming up. They know that they shouldn’t buy those Apple AirPods because they’re pointless and ridiculous. But what a lot of people don’t know is how to control their spending on a micro scale. Things like trips to 7/11 and the little things you buy at the mall just because you’re out. Those add up. And where to the items go? They’re probably snacks you didn’t need to begin with. The point is that frivolous spending is innocuous and tends to creep up on you. You need to ask: what is money management for you and your day to day life? Because you can be up $300 one day and completely in the red over the next few weeks because of little spending fits here and there.
Manage Your Money When You Go Out At Night
Manage your money when you go out. If you’re planning on going out on the weekend for dinner and a few drinks, you have to control your spending. Those Saturday nights can cost $200 easy in a big city. Even if you’re in a smaller town, those shots for friends add up. The golden rule when it comes to going out on the town is to have a predetermined budget. Do not go outside of that. If you feel like your friends will want to go to some fancy rooftop bar later, parse out your spending through the beginning of the night. Try to anticipate your spending. But if all else fails, open up a separate debit account for going out. Load it with enough money for the night and leave all access to the other accounts at home. That’s how you put up budget walls instead of micromanage money. It’s a great strategy for big things like a night out if all else fails. It puts you in flexible control over the situation. Because truth be told, nobody wants to have that many restrictions over them. You’ve got to live a little. And the more realistic you are with your money, the more you’ll save in the long run. It’s about finding that middle ground between excessive and frugal.
Pay Off Your Debts
Your primary objective while managing your money is to pay off all your debt. If you owe any credit card debt or any sort of student loan, that should be your number one priority. That takes precedence over other purchases. If you think you can live without something, good. Use the money you would have used to pay off your debt. Having a good credit score and a great history with payments puts you in a position to get more money when it counts. If you’re looking to buy a house or a piece of property, having a good performance with your credit payments, as well as a stable income, increases your chances of getting approved significantly. So if you want the banks to see you as someone who is worthy of a loan, pay off the smaller ones on time and get rid of a giant chunk of your student debt.
Managing your money is a matter of: knowing where your money is, knowing what you owe, and knowing how to grow. It all has to do with spending a little bit less than you usually would. And once you get used to that standard, maybe spend a little less. But don’t restrict yourself too much. That’s a great way to instill the dangerous “I deserve it mindset” that leaves you broke and in debt. Avoid that at all cost. But aside from that, you should be fine. It just takes a bit of thought.