There are several ways to better manage your money. There are all kinds of apps, programs, people and institutions that can offer you advice and help. Some may offer help for free and some for a fee… I am by no means a financial planner or money manager; however, simple tried and true activities have definitely helped me keep more of the money that I earn.
The key information that I kept in mind from a young age is, money, it’s only a trading tool. My Dad and Grandfather told me “money is a tool, use it that way” when I started my first job delivering newspapers for the Hartford Courant. When I started my first job out of college with Northern Telecom (Nortel) both, Dad and Grandpa, reminded me again. Money is a tool, use it that way. Money is not to be loved or worshipped was always their point to me.
More money does make life comfortable but knowing how to “handle your money” cannot only positively impact your life but also the lives of your children and grandchildren, if you plan and handle money well.
Basic goals in using money as a tool is to keep as much as you can, always be able to pay Uncle Sam what you owe, invest in activities that will consistently increase your net worth and cashflow, and maintain the ability to pay your own bills.
Paying your own bills from the sense of not letting people or companies guide you into setting up direct drafts out of your bank accounts and credit cards. Why would you allow anyone to simply go into your account and take money out of your account or simply charge your credit card(s), when they dictate? That is too much control, plus it’s a pain in the ass to turn off.
Keep people and institutions out of your pocket!
One of the money management strategies that has worked for me is when I opened 5 separate bank accounts for the following purpose – Checking, Savings, Investing, Fun, and Rainy day.
My checking account is simply for paying the bills and living expenses. The Savings account is simply that savings. My Investing account is for saving money for the sole purpose of investing. The Rainy-day account is solely for being prepared for what life unexpectantly throws at me.
It’s easy if you have payroll direct deposit to each account. My percentages that I deposit into each account is 55% into checking, 12% into savings, 12% into investing, 9% into my Fun account, and 12% in to my rainy-day account. Set the ratios and forget it about them. Any bonus or extra money 50% goes into investing and 50% goes to debt.
Keep in mind the goal of using money is not only for acquiring good and services. The goal should include using money to generate more money for yourself! Simply stated, have your money work for you!
Ideally you want to make your savings and rainy-day accounts difficult to access. An example of making your rainy day and savings inconvenient to access would be not having a debit or check access to either account, forcing yourself to go to the bank for accessing either account. Maybe consider having the accounts in a separate banking institution all together. When it comes to your money, make it hard on yourself to make impulse purchases.
Always pay yourself first, you earned the money…. Pay your bills with whatever is left after paying yourself.
Find 20-minutes every 10 days to review your finances, at a minimum. Stay on top of your finances, it is very easy to fall into debt and it can be very hard to dig yourself out. So been careful, be responsible, and be honest with yourself about your money decisions.
Research and ask questions of subject matter experts when you don’t understand money matters, it will pay off in the long run. A good site to read through if you want a better basic view of money check out http://www.usatodayeducate.com/money-matters-101/ and https://www.listenmoneymatters.com/ – enjoy!
Here are 10 strategies that can help you better manage your money.
Be smart with your money and you will have more of it to create and build wealth.
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