Being good with your money is about more than simply making sure that you can afford your bills each month. Life is easier when you have financial skills that you can rely on to make frugal decisions according to your unique needs. You’ll find that you spend less time panicking over where you should be spending your money, and you could end up with less stress in your life too.
Of course, learning how to manage money effectively is a process that takes a lot of time and focus. If you’ve decided that you want to make “have better money management skills” one of your goals for 2020, the following tips will help.
1. Have a Budget
Yes, budgets are boring, and sometimes they can be time-consuming, particularly when you’re building one for the first time. However, having a budget is the only way that you can make sure that you’re making informed decisions about where your money should go each month. The good news is that you can keep your budget as simple as you like. For instance, one good option may be to use the 20/30/50 strategy.
The 20/80/50 Strategy involves spending 50% of your monthly income on your bills, while you put 20% towards your savings, and 30% towards other expenses. You can switch those last two categories around if you want to build your savings quickly.
2. Track your Spending
Once you have your budget, you can begin to keep a closer eye on your spending. Think about where your money goes each month, and where you might be able to start cutting down. For instance, you might need to switch your electricity and gas supplier so you’re not spending a fortune on utilities every month. Alternatively, you might just need to cut how much you spend on things like on-the-go coffee.
Remember, tracking your spending doesn’t mean resolving to only spend as little as possible on everything. Sometimes, you may still need to spend a little extra on things, like taking on credit so you can afford a car that will last you longer than a couple of months or using extra money to pay for a coat that will keep you warm all winter.
3. Make Sure You’re Paying the Best Price
You can make the most of your money by ensuring that you’re always paying the best price for everything you need. The next time you’re shopping for a new television, a refrigerator, or even life insurance quotes, make sure that you compare the offers that you can get from different companies online before you sign up for one business in particular.
There are even apps available that can help to ensure that you’re getting better prices on your digital purchases today. For instance, you can download apps for your browser that check for voucher codes before you buy something online.
4. Plan More of your Purchases
One of the biggest issues that many of us have with money, is that we do our spending too passively. We’re so used to flashing a piece of plastic whenever we want to buy something, that we rarely pay attention to all the money that we actually spend. A good way to reduce the amount of cash that you use each month, is to start planning your purchases.
For instance, the next time you go shopping at the grocery store, create a list of all the items that you need and do your research online to make sure that you’re getting the lowest price on each item. You can also use that list to make sure that you’re not buying anything you don’t need when you go shopping.
5. Make a Date
Finally, at the end of every 3-month period in 2020, make a date with yourself where you can sit down and actually pay attention to how much money you’ve spent, how much you’ve saved, and what you need to change about your current budget. While it’s a good idea to stick to any budgeting plans you have in place as much as possible, your life and financial needs are likely to change over time.
Sitting down either by yourself or with your partner to discuss how your budget needs to evolve will ensure that your spending strategies don’t become obsolete or unreasonable as your needs evolve. You might even find more ways of saving money when you sit down to evaluate your money that you hadn’t thought of before.
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