Before you can ever begin to manage your money, you need to have a plan in place to help control how you spend it. It won't matter how much money you're earning if you're going to just spend it frivolously and not set up a proper budget. Here are some great ways to set up a budget to monitor and control how you spend your money so that you can keep track of it and better manage it.
Many who need to manage their money will learn that it just vanishes if they don't take the time to set u a budget. If you're not sure where you're money is going, you can't save it or keep track of it. So, the first thing to do is to create a budget. Your budget should track how you're going to spend your money, how you're going to save for things that you want to get and how you're going to do that on the income that you're earning.
Monitor Your Expenses
For the first several weeks, you need to record all of the things that you're buying as well as how much money you're bringing in. Keep track of every gas purchase for the car that you make, every coffee or soda that you purchase, every clothing item and anything else that you're spending your money on. You can track these on an Excel spreadsheet to see where you're spending it and where it's all going. You'll be shocked at how much you are truly spending on designer clothing or on coffee and soda. However, with some tweaking, you can wind up saving a lot of money and learn alternative methods to save money so that you'll be able to save for those things.
Cut Back Ties With Your Credit Cards
The truth is - if you can't pay cash for it, you really can't afford it. You'll have to learn to save money until you can buy what you want. Credit cards have all sorts of interest and you'll wind up paying back even more than you spent. By waiting, you'll actually be saving a lot of money and learning the age old technique of delayed gratification.
Start Funding Your Retirement Fund
This is an important step that will help you to have a safety net for your future. You can use the plan at your job especially if they are willing to match what you contribute to the fund. You can also start your own fund. Your money should be deducted from your paycheck so that you'll be sure to save.
Learn to live beneath your means. If you spend all of the money that you earn every month, you'll have none left - none for an emergency and none for fun. Instead, learn to live on the bare minimum and always set some money aside.
Avoid Typical Money Traps
There are as many money traps as there are people. These pitfalls will soon part you and your money. If you're not careful you'll be broke so be mindful of the pitfalls and learn to save. Here are a few pitfalls to watch out for.
Don't be lured into a gym membership with a myriad of benefits. In spite of your best intentions, you're probably only going to go to the gym a few times per week and not the five that you've promised yourself. That few times will ebb into just once a week and eventually, you'll be at home thinking about that gym membership. Gym memberships are pricey and you'll need to see if you're really going to follow through or if it's a waste of your hard earned money. Give it a few tries before you invest in a gym membership.
Phone data charges can quickly add up. If you're not mindful you'll easily go over your limit and be charged more. Every time you check your social media pages, every time you check anything online, you're going to be charged. Soon, you'll be paying a small fortune for this service. Then there are the averages. These can add up even more quickly. Consider a plan that allows you to roll over what you're not using and let this add up.
Ah, that delicious cup of coffee from the coffee shop. It's costing you a fortune. You may be paying more than it's really worth. In time, you'll find that you've spent a lot more of your budget on this than you realized. In just one year you could be spending over $700 on coffee at the coffee shop. Save it for a special treat and invest in a great coffee maker for the home that can deliver you delicious coffee in minutes. It's well worth the savings on coffee and the gas that you are using to get to the coffee shop.
We all love sales, but is it really a bargain if you don't really need it? Likely not. If you need the product and it's on sale, that’s great. But, if you aren't in need of the product and you're buying it anyway, that's not really a bargain. Ignore those flashy emails and sales flyers and save your money.
Okay, there's not really anything wrong with home repairs, or sprucing up your home to make it look nicer. But, it's important to budget these things in and not buy them all at once and pay a fortune for them. Buy things a little bit at a time and focus on what you really need first. When you are sticking to a budget you'll feel so much better and you'll be able to buy what you really need when you need it instead of going deeper into debt. Once you master these steps you'll be more in control of your income and your expenses and begin to save your money.