How to Improve Your Money Management Skills
December 2, 2024 | Posted by: Sherry Corbitt
Handling money can be a struggle for many people. This does not just mean spending money on expenses and other items, yet feeling comfortable with your financial situation. If you are stressed about your financial life and want to improve, rest assured that you are not alone. There are various practical ways that you can learn to improve your money management skills.
Set Financial Goals
An excellent place to start is with your financial goals. Analyze what is pushing you to improve and make a difference in your financial situation. It may be debt or something else that is causing you into a difficult financial life. Once you know why you want to improve, set goals for how to improve. Establish a list of short and long-term goals that you can realistically set within a reasonable amount of time. The more time you put into working on these goals, the more you will notice your money management skills.
Stay Consistent
There are numerous expenses that everyone has to pay, such as rent, mortgage payments, utilities, and necessities. To make these payments possible, it is essential to stay consistent. It is easy to tell yourself that you will catch up on a payment next month, yet this is dangerous thinking. Not only will you have to pay an additional cost for the interest, yet this can throw off your payments. In addition, it can be challenging to make up that payment, especially if you have not received your paycheck yet. Staying consistent with all your bills will not only keep you organized with your payments, yet it will become a good habit that will stick with you.
Setup Proper Bank Accounts
Managing money can be a struggle when you are unaware of your funds. When you have one or two bank accounts, money can become very messy and unorganized. It can be difficult for you to tell what money you can use towards what. You can also lose track of what savings you are planning on using and what savings you are not touching. To avoid anything like this from happening, create a few different bank accounts. These other bank accounts will hold different purposes for your funds. For example, one bank account can have all your untouched savings, another can be for daily use, and another has other money for emergency uses. It is easy to set up these accounts; you can easily visit the bank and have them assist you. Having even an extra account or two will help you organize your finances and ensure that you can manage them effectively.
Plan For the Future
Although managing your money for the present is essential, it is also wise that you consider your future. Everyone needs to think about how you will be able to support yourself financially once you are retired. Some jobs have retirement saving plans already set up for their employers, yet not all jobs do this. To see if you have this with your employment, refer back to your company paperwork or speak with your boss. Even if you do have one, having additional savings set up is good. Establish how much you are making and consider a reasonable amount to take off for your future savings. Although you may be contributing a small amount every month, it will amount to a large sum within years to come.
Save First and Spend Later
When your paycheck for the week comes in, are you quick to buy that wish list item you have been looking at? Many people admit to spending a good amount of their money on things that they want. Of course, nothing is wrong with this in a sense. When you are trying to build your money management skills, an excellent term to save first and spend later. Although you may think that it is harmless, the amount that you spend can add up quickly. When you save your money first, you can take the time to evaluate how you can practically use it. Some of the money can go towards your household expenses, while another part goes to your savings. When you save your money first, you not only offer yourself financial stability, yet you are creating a healthy lifestyle. When you learn to keep, you can avoid unnecessary shopping sprees, which can seriously hurt you and your financial life.
With these few tips, you can gradually begin to make managing your money successful in your life. Of course, it will take time to reach your financial goals, yet when you stay consistent and plan, you are sure to achieve them. I am your Mortgage Broker for life – so reach out and let’s discuss. My advice is always free, and I’d love to hear from you.
Sources
Cao, Jack (2021). 3 Ways to Improve Your Money Management Habits. Habitify Blog. Retrieved from https://www.habitify.me/blog/3-ways-to-improve-your-money-management-habits
The Money Equation (2021). 7 Steps to Improve Your Money Management Skills (Please Implement!). Retrieved from https://the-money-equation.com/improve-your-money-management-skills/
