Disclaimer: From time to time I have some really smart people write guest post for this blog. I love having others contribute their ideas to this little corner of the personal finance world. Today, we have a guest post from Jennifer Scott (firstname.lastname@example.org). Take it away Jennifer.
Putting some time aside to manage your money can be such a beneficial pastime. In addition to helping you manage your bills and not having to live paycheck to paycheck, you can also save thousands of dollars every year, giving you the unique ability to pay off any debts that you might have effortlessly.
Today, we’ll explore a handful of key ways you can take back control of your money for a better life.
The best way to manage and control your spending is by budgeting yourself. For example, by budgeting yourself $30 a month on takeaway food, you’re limiting how much you spend. This means when it gets to Friday night, and you’re craving a pizza, you can simply say to yourself, I’ve exceeded my budget, and you’ll have something else. This is such a great way to save money.
Open a Savings Account
While on the topic of saving money, if you haven’t already, open a savings accounts. Any extra cash you have laying around at the end of each month put it in your savings account instead of spending it. A savings account means you’ll always be prepared for when an unexpected bill comes up, leaving you more money to play with every month.
Andrea F. Steele, the financial manager for Top Canadian Writers, explains;
“One of the first things I did when I became the financial manager for Top Canadian Writers was to set up a company savings account. This way, when the business had plans to expand or add additional services, we easily had the money to do so!!
Avoid Large Spending
Larger purchases may often be tempting, but they will seriously damage your bank balance. If you really want something big, such as a brand-new television, work out a savings plan so you can afford it, instead of just impulse buying it. Another great way to avoid these expenditures is by waiting a month to see if you still want the product.
‘Bills’ could cover your debt, credit card debt, loan repayments, phone contracts, utility bills, rent and anything else you must pay each month. By paying off things like loan repayments and credit card debts as soon as possible, you’ll be able to save money in the future since you’ll be paying back less.
Try and set up your direct debits, so your bills come out of your bank account as soon as you’re paid, usually the day after. This will help you see exactly what money you have left over to play with for the rest of the month.
Lenora A. Harrison, the financial manager for Best Australian Writers, continues;
“Another great piece of advice is to set up a direct debit to your savings account and treat it like a bill. This way, you can pretend that this money never existed, but it’s still always there if you need it.”
Monitor Every Cent
There’s no better way to manage your money than to give every cent you earn a job. Let’s say you earn $2,000 per month. Firstly, as above, you pay off your bills. Let’s say, with rent; they total $800. This leaves you with $1,200.
From here, divide this into equal amounts of each week, so you’ll be spending $300. This figure then needs to be to be divided into food, fuel, clothes, social events and any other expenses you may have. When budgeting, try to give every single cent a job, so all your money is spent as efficiently as possible.
Address Problems Quickly
Finally, one of the most important tips you’ll need to follow to be successful in this venture is to address problems that come up quickly. For example, if you’ve just had a problem with your car and it needs fixing, fix it as soon as possible. If you rely on a car, not having one could cause more problems, and it will cost you more money.
Likewise, if you’ve missed a credit card payment, call up your bank immediately and address the problem. This will stop you occurring additional late payment fees.