Are your money management skills lacking guidance? If so, here are 3 tips to manage your money better!
by Troop Atomic Mommy
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If your finances are in disarray, then you are probably wondering how to get it back on track. You may be thinking it’s time to save, or borrow from a friend. But what is better and what are some tips to use?
As the old saying goes, never mix money and friends/family. But if you have to, then borrow from people that you can trust to keep to their word. Why? Because with a loan, often comes interest. And if you’re wondering, “is it legal to loan money and charge interest?”–the answer is yes, it is legal, whether friends charge you or a bank.
So before you dive into borrowing money from anyone, try using these 3 tips to manager your money!
#1 Don’t spend until you have seen all of your options.
If you need to make a significant purchase, do your financial research. Can you afford it, or are you just convincing yourself that you can? Do you have enough cash on hand to purchase it or will you be using a high-interest credit card? These are the first questions to ask yourself when considering a large purchase.
If the item is a rather minimal cost, it may be more budget-friendly to risk the upfront cost rather than placing it on a high-interest credit card that will only cost you a great deal in the long run. Keep in mind that too much interest added to an original cost will quickly add up and become unmanageable. After all, there is a reason why people say cash is king.
But if you absolutely must use financing as a means to make a purchase, then be sure you can afford the repayment or payments, and that the purchase will not put you in a financial bind between now and your next payday.
Of course, the ideal situation is for you to save up for anything you want and not have to use any credit at all as this is the better option. If you don’t have a choice, be sure you can afford things before committing to anything.
#2 Make a financial plan.
Making a budget isn’t everyone’s idea of fun, and it’s true that going through all of your spendings, writing them down, laying out expenses, totaling everything up, and double-checking that you haven’t forgotten anything, isn’t the most enjoyable way to spend an afternoon.
The good news is once that budget is completed and you can see precisely where your money is being spent, you’ll be glad you followed through.
You’ll be able to identify where you’re paying for things you don’t need, and you’ll be able to stop or reduce those repayments once you notice them. You will also be able to identify the areas where you can save.
More than identifying problem areas in your personal finances, having a sound financial plan for your business use is also quite beneficial. This is because you can differentiate between necessary spending like in the case of using a virtual business address, versus frivolous costs that won’t grow your business.
#3 Make sure you shop around.
Nowadays, you can compare any item with each other, before you agree to pay for it. This is thanks to the internet and a burst of online businesses. And because you can, you will be able to get the best deal possible.
When making a comparative analysis between products, be sure to factor in any shipping expenses, sales tax, and any VAT costs, since these can quickly turn a seemingly good offer into a costly mistake. To help keep your costs down, scour the internet for coupons that can be applied to your purchase. But before clicking ‘Buy Now’, be sure that the discount you’re getting is better than anywhere else, otherwise the purchase won’t be worth it.
Use the difference between what you actually spend and the higher prices, to place it into savings. Just knowing you’ll be able to make your purchase while also putting funds towards other joyous activities like vacations and property, you’ll be that much more likely to continue the positive financial habit.
The Takeaway
To manage money well takes a plan, some smart choices, and a good review of spending habits. These tips should help you to stay in control of your money and save more. Do you have any other tips that could help? Please share them with us.