5 Tips to Help Strengthen Your Money Management Skills
Are you good at managing your money, especially in hard times like these? If not here are a few ideas to consider. It’s always a good idea to tweak and reevaluate your money management skills. The world of money can be a huge task to manage which can get overwhelming at times. However, with clear goals and careful calculations, you can adopt a manageable system that works well for you.
A Few tips to help strengthen your money management skills:
- Tweak your tracking system. You probably already track your spending to some degree, but it would be helpful to see what it’s like when you track all of your spending. Try doing this for at least a week. When you see all of your expenses written out, you’ll be able to clearly see what’s necessary and what’s not. You can then decide to spend your money differently based on your current spending habits.
- Consider your savings. 401Ks and other tax-advantaged retirement plans are a good option for long-term savings. But remember, it’s important to have money in a regular savings account too that you can access regularly for surprise expenses, like home repairs or unexpected illness.
- Determine your real needs and wants. If cutting back drastically is a necessity at this time, look at your monthly expenses in detail. Make a two-column list and divide your expenses into needs and wants, then eliminate as many items from the “wants” category.
- Set yourself realistic goals. It’s important to be realistic when setting out new money management goals for yourself. You shouldn’t do anything too drastic too quickly. It’s best to make changes in stages and ease into new situations. You’ll avoid shock this way.
- Reward yourself a monthly allowance. If you tell yourself you can’t spend any money, you’ll get frustrated and you’ll be more likely to revert back to old habits. Instead, give yourself a monthly allowance as a reward for adapting new habits. Tell yourself its ok to spend $50 to $100 each month on the things you enjoy. You’ll have some fun and save money at the same time.
When You’re Ready to Change
The trick to strengthening your money management skills lies in your drive to change. People usually run into trouble when they want to save money but are unwilling to live a different lifestyle.
Realize that you can shift your lifestyle without it being a burden. When you start slow and make small changes, you allow yourself the time and opportunity to create positive new habits.
For example, you can start with your grocery bill. Decide if there are certain expensive foods that you can skip. Tell yourself that you can treat yourself to them whenever they go on sale. This way you’ll still indulge yourself every now and then, but you’ll be saving money.
Long Term Goals
Keep your eyes on your long-term goals. Where do you want to be next year, two years, 5 years, in 10 years? Make an attainable action plan with your finances that will get you there.
When you keep your goals in mind, you maintain a drive that also enables you to enjoy the journey. These strategies will help bolster your money management skills. With your newly acquired financial skills you will soon be able to enjoy your life without the financial stress.