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Essential Money Management Tips

So you’ve made your New Year’s resolutions and you know exactly what you want to achieve in 2016. You’re on the right track!

Developing strong money management skills can help you use the money you have today to live the life you want in the future. Here are some helpful tips on how to manage your money

Start a budget

The first step to managing your money is to understand where it is coming from and where it is going. Establishing – and sticking to – a monthly budget is essential for long-term financial health. For the tech-savvy you can put your smartphone to good use by downloading a free budgeting / personal finance app to automatically track spending, account balances and credit on the go.

Stay Organized

Create a list of your current bills and other expenditure. Print a calendar and record the due date of each bill. Paying your bills on time will help you avoid late fees and penalty charges. Let’s face it, sometimes money seems to just disappear right? Your favourite morning coffee, food at work, allowances for the kids. Just write it down and by the end of the month you’ll know where almost all of your money goes.

Keep an emergency fund

There will be unexpected purchases and unplanned spending; building an emergency fund to avoid having to take loans to pay for unexpected purchases can also help in a big way.  Why? Because you could lose your job, or your refrigerator could die, or you might have to get an emergency root canal. And if you don’t have enough cash on hand, you don’t want to find yourself racking up credit card debt or getting a loan. Aim for a fund of three (3) to six (6) months of your salary

Set a savings goal

The best way to save money is to pay some money into a savings account every month. It’s also easier this way to keep track of every penny. Some people find it hard to get motivated about saving, but it’s often much easier if you set a goal. Possible savings goals to consider might include:

  • Downpayment for a new home
  • Vacation or “stay-cation”
  • A new car
  • Buy that new piece of technology you’ve had your eye on whether it be a new phone or tablet

Reduce your debt load as quickly as possible

Change the way you think about your debt. Don’t think of your loan payment as a monthly bill, think of it as a stealer of dreams. You need to hate your debt. Force yourself to pinch, pinch and pinch some more. Lowering your spending will raise the amount available to pay off your loan. Increasing the amount of your monthly repayments can shorten the life of your loan and save you interest.

If you don’t have the time or the money to embrace all of these tips, that’s OK. Pick one or two to get you started

Tell us, how do you manage your finances?