When it comes to money management, people are quick to offer unsolicited advice. Some of the advice could make sense, still you will find the most of them are just general information. Applying this information to your life is not an especially good idea, especially since some of it may be confusing and/or incorrect.
Yet, the question remains, Exactly how then do you propose to manage your finances and how can you stop spending money on useless items?
Generally, the problem is that most people lack a good understanding of just how important saving for the future is. Such people start to spend as soon as they get paid, and only occasionally put anything into their savings account. Anytime you save money it is better than not doing so, but this way is far from ideal.
Managing Your Personal Finances Efficiently
When it comes to saving money, let’s take a look at a few tips that should help out with your goals. The results you are likely to achieve will be delightfully surprising, and it is why many successful people are using these methods to save money.
20% Of Your Earnings Should Be Saved
Even though you may be used to spending most of your paycheck, it is time to switch things up. The first 20% belongs to your future and is not meant for current spending, regardless of the amount you earn. You can open a special savings for this amount, or even make a place in your home or wallet for your savings. The most important part is to make sure you always have 20% saved, and to use the remainder for buying food, paying the bills, and buying items for yourself like fancy shoes.
Saving money helps you create a healthy financial habit that will allow you to budget your money efficiently for the rest of your life. Think about how nice it would be to know that you have some money aside in case you need it for an emergency.
Thrive By Keeping It Simple
For sure, all those new electronic devices out there look nice, especially the new iPhone 6 Plus right? Your office mates may have the latest iPhone, but you bought an iPhone 5S not so long ago. While all of these new phones are quite tempting, you should not buy any unless you are really in need. Before buying a new one, ask yourself if it is really necessary.
What can that new phone do that your older one cannot? It is important to sometimes reward yourself with luxuries, just be sure this is something special and not one of those bad habits you do again and again. Try only spending your money when you know there is extra, excluding the 20% that must be saved.
Use Cash Instead Of Credit
Don’t use that shiny new plastic credit card just because it’s so pretty and meant to be used. A lot of people find themselves in debt because they couldn’t resist using their credit card. That $50 dress that you purchase wont do no harm since you can pay it in a month, right? Unfortunately, over time those $50 purchases add up and paying the bills off becomes an exercise in futility.
Using cash as much as possible will help to curb this tendency. Use your credit cards only in an emergency situation. Usually, you can substitute a debit card for a credit card anyway.
It’s really easy to manage your budget and your finances when you save 20 percent each check. Break your old spending habits and create new ones.