Saving money is complicated for many people but it’s one of the most important things in our lives. Taking finances under control means juggling rents, bills, debts, retirement accounts, and many other things. This list is actually long. Therefore, you need to learn how to manage your money right now. We’ve collected seven simple ways that could help you save money and get the finances under control.
Before doing anything it’s important to figure out what you want your financial future to look like. Sit down, take a pen and paper, and make a list of the things you want to buy. Do you want to have a big wonderful house near the sea? Or maybe you want to visit some European countries? Write all these things down. It’s also important to have separate savings account that you can use for emergencies.
Then figure how much money you need to achieve goals. However, if you’re struggling to answer, it might be worth hiring a financial advisor.
Licensed financial planners recommend storing up to three to six months worth of expenses in times when regular income is disrupted or decreased. If you currently spend $5,000 a month on food, utilities, entertainment, and other things you’re regularly buying, you have to reserve between $15,000 and $30,000.
So, have the list of your goals, and now you need to figure out which ones you care the most about. Then, number your goals based on what’s most important to you.
In order to understand what goals are most important for you, prioritize your monthly bills and then balance emergency savings, debt payments, and retirement contributions. Then you will be able to start investing in other things.
Tracking your cash flow is essential. This will help you figure out exactly what you’re doing right and what you’re doing wrong. Create a budget based on what you’re going to spend in a given month. Try putting 50 percent of your money toward necessary expenses, 15 percent toward your retirement account, and 5 percent toward your savings. The other 30 percent is to spend or save. Then spend six months monitoring your cash flow.
It might be difficult to remember all the expenses: regular debt payments, monthly bills, and savings contributions. However, automating expenses(direct-deposit paycheck, paying for rent, debt payments) will help you remember everything you need.
Actually, most credit cards have rewards such as like travel points and cashback, particularly to those who regularly use them and stay on top of their payments. If you don’t know about the rewards of your credit card, call your bank.
Learning more about finances, investments, tax planning, and other things will help you control your finances well and avoid problems. Use educational resources like articles, or videos for the more visually inclined.