Learning how to manage your money may seem stressful, but taking ownership of your finances really pays off – literally.
What will you learn?
How to start keeping track of where your money is going and how to stay in control of your personal finances.
How to manage your money
Managing your money and taking ownership of your finances can improve your mindset around money, as well as your bank balance. Working on your money management skills can help you to pay off debt, reach your financial goals and build your wealth for the future.
Personal finance doesn’t have to be daunting. With a few simple steps, you can take control of your money and put in place a money management system that works for you. Start by setting aside a dedicated time to check in and review your finances on a regular basis, and you can begin to improve your financial situation in no time.
How to manage your income and expenses
For most people, monthly money management and paying bills centres around payday. Yet it’s still easy to ignore the benefits of a money management system and take an ad-hoc approach to finances. However, there are a number of ways that setting up a system to manage your finances can help you to spend less and save more. Understanding your income and expenses is vital when it comes to setting financial goals. Without these key pieces of information, it’s difficult to set yourself up for success.
Whether you choose to work with a spreadsheet or track your spending with an app, find a way to keep an eye on your monthly outgoings. This way, you’ll gain an understanding of where your hard-earned money goes and importantly, where you can cut back spending and save money. Without a money management system in place, it’s easy to miss payments for unused subscriptions which you can cancel and save on.
A money management system also provides increased visibility over your bills and utility payments. Often, these payments go unnoticed as they are essential payments. However, don’t forget that you can switch utility providers easily and seamlessly. This could potentially reduce your bills by hundreds each year. If you check your regular outgoing payments, you’ll notice when bills are higher than usual and can research cheaper alternatives.
However you choose to log your spending, tracking your expenses will give you clarity on where your money goes.
A money management system can show you how much you spend on bills and where you can save.
Simplify debt repayments
Paying back debts can be expensive and if you have any commercial debt, it can often feel that the debt isn’t disappearing as quickly as you’d hope.
The first step in paying off your debt is understanding exactly what you owe. It might feel scary to check the numbers. But without this knowledge you’ll be in the dark about how much you need to repay and what might be the most effective way to pay off the debt. Once you have a total figure, take the time to understand the interest rates on loans or credit cards.
When it comes to paying off the debt, focus on priority order and pay off the highest interest rate debt first. Set yourself payment goals based on what you can afford to commit, and create a way to track your debt repayments. This provides a way to watch the balance decrease over time visually and keep your motivation up.
Using a visual debt repayment tracker can help keep motivation high when working towards paying off debt.
Automate your way to your goals
Without a consistent approach to money management, reaching your financial goals can feel like an uphill battle. This can leave you feeling demotivated. One way to achieve consistent money management is through automating your money.
Automate as many payments as you can. This includes payments to your savings, investments and any debt payments you need to make on a monthly basis. By automating your finances, you can allocate realistic amounts of money towards each automated payment category and move closer to your goals. All this without the temptation to leave any money in your bank account to tempt you to spend.
Key takeaways on how to manage your money
- Finding a method to track your income and expenses will help you gain clarity on where your money goes
- Using a visual debt repayment tracker can help keep motivation high when working towards paying off debt
- Avoid impulse spending and keep you on track towards your financial goals