(Newswire.net — October 14, 2020) — Managing your money can be tough. With bill payments to worry about, crazy rent prices, student and medical loan payments to make, and tons of other unexpected costs coming out of the blue almost constantly, it’s no wonder why so many people struggle to effectively manage their money.
Today, we’ll be covering 5 simple steps that you can take to help ensure that your money is managed well – and maybe even ensure that your money starts working for you. Getting started can sometimes be the hardest part, but with the right planning and perseverance, keeping your head above water financially is possible.
Make a budget
One of the best money management hacks out there is also one of the most straightforward: budgeting. Without a budget, it’s easy to accidentally spend money on unexpected items, overspend on areas where you should be cutting back, and wind up at the end of the month not totally sure where your money went.
When budgeting, consider making a few different categories that you know you’ll consistently spend money in:
- Rent and utilities
- Debt repayment
- Groceries and other regular necessities
- Car expenses
- Medical expenses
- Fun money
Take a look at your credit card bill, debit card statement, or bank statements and see how much you spend in each area. Then, decide how much you’d ideally like to spend on each area (realistically, of course), and make your budget based on that.
Plan for the unexpected
Unexpected expenses are a fact of life. Sooner or later, you might get sick and wind up with a costly medical bill, your pet might need a trip to the vet, your car might break down, or you may need to fly across the country at a moment’s notice; these things happen.
So, it’s important to set up an emergency fund to plan ahead. How much should you save up? That depends on your income and regular cost of living. Most experts recommend saving up between 3- and 6-months’ income for an emergency fund. That way, if you happen to lose your job, you have enough to live on until you can find work again.
That amount of money can sound daunting – but if you start saving now, you’ll be able to slowly work your way there over time.
Look for ways to grow your savings
Once you’ve got on more stable ground, and you have a steady stream of income coming into your savings account, it’s time to start seriously thinking about putting that money to work. Sure, you could just park it in savings, but with rock-bottom interest rates, you’re really leaving money on the table.
Consider finding an investment account or broker who can help you find ways to put your money to work. Be sure they’re knowledgeable on everything from ETFs and index funds, to a mortgage pipeline or day trading, and let them help you get your money moving.
Think about cutting costs
One way that you can accelerate your savings goals is by looking for places where you can strategically cut costs. Most people tend not to be mindful spenders, which means they are likely to end up with a number of different costs on their plates that they don’t truly need.
It could be regularly buying lattes at cafes instead of brewing it at home, paying for subscription services that you no longer use, or going out on the town a little more often than you can realistically afford. Whatever it is, look through your credit card payments and bank statements, and find the places where you could stand to be a little more mindful.
Then, once you’ve identified those problem areas, cut your spending, and instead start putting that extra cash into your emergency savings – or even start investing, as previously mentioned.
Consider a side hustle
If your current income isn’t leaving you with much left over for a comfortable wiggle room, it may be worth considering starting up a side hustle.
Side hustles are a great way to bring in extra cash, and can even be a fun hobby, depending on the hustle you choose. Gig-based apps like Uber, Lyft, DoorDash, and more make it easy to pick up a side job while still keeping your regular hours at your day job.
If you have more marketable skills, freelancing sites are also an excellent option. Writing, video production, web design, coding, and graphic arts are all commonly sought-after skills that you can apply today.