Handling money can be tricky. Some people are born with a good sense of budgeting, saving, and investing, while it may not come as natural for others. If you find yourself struggling with it, you’re not alone. It’s hard to accept that you might be bad with money, but it doesn’t mean you can’t learn.
It’s never too late to develop a strong sense of managing finances which is a good sigh of relief for those looking to build up their portfolio, save money for school, or just live their day-to-day with less stress about money. It is, after all, one of the biggest causes of stress so you want to have a grasp on it. If you need help on how to easily manage finances better, here are some tips.
Create Financial Goals
First things first are setting some goals you want to achieve. It’s not a bad idea to start with smaller goals, like building a savings fund for emergencies (job change, relocating, car troubles) to get you started, then later moving towards a retirement plan goal or a goal of buying a house. Starting off with smaller, more manageable financial goals will help you figure out the benefit of saving, investing, and budget, without getting too overwhelmed about not having enough stashed away yet.
Set Up a Budgeting System
After you set up your financial plans, you can start budgeting too to help out in the short term. If you look at the software from calendarbudget.com, you can see how simple it can be to sort out your expenses and figure out what’s necessary and what isn’t. Getting a concrete view on where your money is going, in terms of small purchases that add up, or big expenses like rent, helps you conceptualize your money in a more real way. Budgeting is a good way to move money around into areas where you’ll need it most.
Reduce or Payoff Debt Before Making New Purchases
Before you start considering big savings accounts, investing in stocks or mutual funds, or making new purchases, you’ll want to start paying off debt or pay it off entirely. This means calculating the interest you’ll be expected to accrue on credit cards, loans, etc., and chipping away at them. Focus on the little debts that can be paid off right away and help save you from interest building up, then work your way towards the bigger ones. When you get rid of smaller debts, it will feel like a relief not having to handle so many at once and let you focus on the intimidating payments with a clearer mind.
Investing vs. Saving
Some people like to save, some like to invest, so it comes down to which one you feel most comfortable with and which one you know more about. It takes a long time to learn about the stock market on your own, so for now, putting a portion of your paycheck in your savings account is a safe bet. Over time, you’ll want to do your research to find a good financial advisor to help set up an investment account, often through your bank, so you can start putting money in assets for long-term plans. Another piece of advice is to take advantage of a high-interest savings account as well.
Make an Emergency Fund
It was mentioned prior, but it’s a good point to make that an emergency fund is incredibly valuable to you. Life can be unpredictable, so it’s a good choice to build enough savings that will allow you to handle any curveball life throws at you. Whether it’s medical expenses, finding a new place to live, changing jobs, or an issue with your car, having something store away to help you get through a tough time will keep you on track for your long-term goals.
Become More Frugal
Everyone hates to be that friend that turns things down or doesn’t buy new things to show off, but that’s also because no one wants to admit that going out to eat multiple times a week or buying new clothes when your wardrobe is perfectly fine as is, is simply irresponsible financial behavior. Don’t feel bad about limiting your dining out schedule or buying things used, it’s only going to help you manage your finances more positively by building good habits.
Finances are tricky and can be a struggle for many, but they don’t have to remain a sore spot in your life forever. Use the tips provided here as a good starting point to developing better habits, creating a solid plan for your future, and taking back your financial freedom one step at a time.