Managing money takes practice. You have to get into the habit of tracking your finances, understanding how much you’re making on a weekly, monthly, and yearly basis, and then applying these specifics to your spending habits. There is a lot to keep track of, but it is possible to learn how to improve your money management skills. To learn more ways to manage your money, here are five ideas to get you started.
1. Utilize Digital Budgeting Tools
Keeping track of your money with a budget can be a helpful way to keep things organized and avoid financial mistakes. You will be more aware of where your money is going with tools that automatically calculate your totals and organize your money into categories.
You can sign up for an online budgeting tool or download an app to keep things even more convenient. You can also find hosted tax software to manage your taxes too! It’s never been easy to manage your money with free options like digital budgeting tools.
2. Get Professional Guidance
If you’re brand new to managing money, you can improve your efforts by working with a professional financial advisor or a bookkeeping professional, if you own a business.
Your advisor can show you practical strategies for managing your money and creating more opportunities for you to save and grow your wealth for the future. Don’t let the idea of learning how to manage your money overwhelm you, as everyone starts somewhere. Once you learn the basics, you can start managing your money yourself! The goal is to become financially literate so you can better manage your finances.
3. Set Entertaining Goals
You can make managing your money more fun by setting goals for yourself that lead you to rewards. For example, if you manage to save 10% of your income for four months, treat yourself to something nice like a cupcake, dinner date, etc. Don’t spend all of your savings but treat yourself to something reasonable. Small motivational strategies like these can help you continue saving with less stress.
4. Get A Side Hustle
It is much easier to manage your money when you have more of it to work with! Take up a side hustle to bring in extra income that you can set aside for necessary expenses or as more contribution to your savings. Consider work that you feel you can manage outside of your day job. You might consider selling handmade goods if you are crafty or offering to do some landscaping in your neighborhood. Think about your skills and look for occasional gigs that support your natural gifts and talents. Try to make generating passive income as fun as possible.
5.Use The Cash Envelope System
The cash envelope system is a specific kind of budgeting that beginners use to adjust to monitor how they use the money they make every day. For the week, divide up the money you plan to use for each labeled envelope. Your labels should be things like “gas,” “groceries,” “spending money,” “bills,” etc. The goal is not to deviate from the set amounts you’ve given yourself for each envelope. Using this system, you practice working with what you have, avoiding the urge to dip into savings and learn to cultivate a healthy mindset surrounding your money.
The Bottom Line
Managing money is tricky at first, but it gets easier with practice. See what you can do to make the process easier by considering the suggestions above. By holding yourself accountable for purchases, you grow financial awareness that can help you make better financial decisions. When in doubt, work with the financial experts you trust to set you on the right path!