15 Money Management Hacks You Must Know (No 8 is my favorite)
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We’ve all seen the money-saving tips that save a lot of ‘cents’ (see what we did there?). Money jars for spare money, a year of saving $5 bills, biscuit tins packed with $2 coins — the list goes on and on.
And they do work to some extent!
While these suggestions are useful for accumulating small amounts of money, it’s the big-ticket items that have the greatest impact on long-term financial security. We’ve compiled a list of 15 money management methods to get you started on the road to financial success.
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Budget like a pro
1. Don’t live from pay to pay
When you’re in the middle of it, it feels insurmountable. However, if you’re surviving by doing so, you can also survive by not doing so. It only takes a few months of extreme discipline to break this pattern, after which you may begin to plan for the future. More advice on those ‘tough months’ is on the way….
2. Build a buffer
Because life happens, be sure you have finances available to deal with unforeseen bills. Cars break down, jobs are lost — having a ‘emergency fund’ to handle financial catastrophes relieves stress and provides stability when you need it most. The suggested objective is six months’ worth of living expenditures. It’s a simple matter of continuing what you’ve started, breaking the month-to-month cycle with our Tip 1, and then continuing for a few more months.
3. Make a budget
Your money will always find a way to spend itself unless you make a plan. It may be tedious or even frightening, but it works — so don’t put it off any longer!
Begin by assessing your monthly income, spending, and financial goals, then writing a plan, removing expenses where possible, and getting started. Remember to assess your circumstances on a frequent basis or whenever it changes. Make use of a budgeting program or app, and don’t forget to set aside money for savings and debt reduction. Don’t just nod your head as you read this; actually do it!
4. Apply the 50/30/20 Rule
As a general rule, set aside 50 percent of your income for necessities, 30 percent for ‘wants,’ and 20 percent for savings or debt repayment. Isn’t it nice and simple? If it seems unachievable, shoot for 60/30/10 or whatever ratio is reasonable at the moment, and adjust the ratio as things improve. But make an effort to keep to it!
Money management at your fingertips
5. Use finance apps
There are a number of excellent money applications available that can assist you with budgeting, saving, and keeping track of your expenditures — think of it as a personal financial advisor in your pocket. Here are some popular budgeting and saving apps, in addition to those given by major lenders:
Splitwise It is an easy tool for splitting bills with friends and keeping track of payments.
Easyshare It is a payments app that splits payments and bills in a shared household.
ATO is a smart tool for all things tax-related including lodging and tracking returns with access to ATO tools and calculators.
- Try using cash day-to-day
Using cash every now and then is a good idea. You’ll immediately discover how much you spend and on what — an almost empty wallet, especially if it’s mid-week, can be a sobering picture.
Put some structure around it by calculating how much discretionary spending you’ll require and then withdrawing that exact amount of cash, as it’s easy to lose track when you’re not immediately handing out cash. Check out how utilizing cash works for you; who knows, it might serve as a wake-up call about where you can save money and how you can cut down on unnecessary spending.
Be a savings expert
We are more prone to give up when a goal appears to be too far away. It’s a terrific method to obtain the outcomes you desire if you have a realistic and practical savings strategy that focuses on big goals with smaller targets along the way. Don’t allow saving to become an afterthought; create a savings system and start saving right away. However, be warned: saving is addictive!
7. Open a separate account for your savings
We understand that this is a no-brainer, but if you see money in your daily account, you will spend it. Fact. Set up a specialized savings account to accelerate your savings. Look for products that give out a lot of interest and even penalize you if you make a withdrawal. Yes, this is becoming a serious situation.
8. Automate your savings
If you never see the money, you won’t miss it. Setting up an automated payment that directs a portion of your weekly income to your savings account is a simple and effective approach to expanding your savings without discomfort or temptation. We all know how to do it; the problem is figuring out how to leave the money alone when you’re in a need. If you open a savings account with limited access, you’ll only withdraw money in REAL emergencies, not on the spur of the moment.
Get set for debt destruction
9. Love your loan
For many people, getting a personal loan is necessary because they need a new automobile, car repairs (sigh), or other large bills that they can’t afford. Personal loans, when used wisely, can be a useful instrument. They may have lower interest rates than credit cards and a payback schedule, indicating that your debt has a deadline.
The key to successfully repaying personal loans is to handle debt management in a thoughtful and rational manner. You must be as cautious with your debt as you are with the car you recently purchased.
The earlier you repay your debt, the less it will cost you in the long run. Look for personal loans with cheap interest rates and features that allow you to make extra payments. Any financial windfalls, such as work bonuses, birthday money, or tax refunds, can be sent directly into your personal loan. By lowering your debt, you’ll also lower the amount of interest charged on your existing balance — a win-win situation! However, keep a lookout for early termination fees.
Spend some time looking for the best rates and costs. When you have the correct product, it pays out in the long run.
10. Consolidate your loans
Debt consolidation provides a fresh start by allowing you to reorganize your debts and pay them off more quickly. You can manage your debt and save money on interest charges by consolidating all of your payments into a single personal loan. Personal loan interest rates are often cheaper than credit card interest rates. It’s motivating to have a deadline to be debt-free, and it’s a relief not to have a financial burden hanging over your head.
11. Credit cards can be your friend or your enemy
It all depends on how you treat them, which means paying off your balance in full each month if at all possible. Too many people merely make the bare minimum monthly payments, accumulating debt and becoming trapped in a debt cycle with no end in sight. Look for credit cards that provide great payment plans, such as the Latitude Gem Visa.
If you have a credit card, attempt to pay off the entire balance each month. People, this isn’t a drill.
Stealth Saving for your future
12. Manage your future smarter
NOW, regardless of your age, is the moment to start thinking about your future.
To begin, figure out how much money you’ll need to live the lifestyle you want in the future.
Make sure you’re saving as much as you can each month for the long run, without making your life difficult now.
13. Save money on bills
Why spend more money on bills than you need to? Go over each one and search for methods to save; you’ll be astonished at how much you can save. Remember, you don’t receive what you don’t ask for. Be the one who receives.
Mobile Phone Plans.
- Care for your credit profile
A credit profile is made up of your credit score and your credit report, which is derived from your credit history and is used by lenders to determine your creditworthiness. Your credit history is updated every time you apply for a personal loan or a credit card. Applying for credit on a regular basis can have a negative impact on your credit score. When a lender examines your credit history and sees that you have debt exposure and have applied for credit multiple times, they may view you as a higher credit risk.
15. Buy property when it’s right for you — but early is good
The most difficult task and goal are to gain a foothold in the real estate market. The earlier you buy, the better off you’ll be, and you’ll be even better off if you buy a house with the land rather than a condo because it has more appreciation potential. But don’t purchase just to buy; make sure it’s a long-term affordable position with a sufficient deposit for the proper place.
CONTRIBUTED BY Ayoub Mouhachtt
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