A Guide To Personal Finance: The Basics
You might be thinking that you need a better-paying job or a large inheritance from a relative to improve the overall state of your finances.
For years now, financial experts maintain that all everyone needs to do is to adopt better money management strategies. These strategies often involve budgeting and cutting back on expenses, like purchasing coffee at a cafe and eating in a restaurant. Better money management can help you save more.
There are many things you can do to not feel that your finances are in dire straits. Below we will list some of the best money hacks to help you get your personal finances in order.
Keep track of your spending
You can improve your spending habits by simply being more aware of where and what you spend each month. This can easily be done if you move your finances online and keep track of all your financial standing with the best personal finance tracking apps that will allow you to make wise spending decisions.
Use cash instead of cards
Instead of charging items to your credit card, you can use cash for expenses such as fuel, dining, and groceries. Cash will make your spending seem more real and controlled. You’ll also be able to see how much money you have left over, rather than spending without a clue of where you stand with your bank.
If you are using a credit card, you will likely be making impulse purchases, but if you are using digital banking apps, you will only spend what you can afford.
Make a realistic monthly budget
To determine a budget that you can keep and live comfortably on, you should consider your monthly spending habits and your monthly net income.
That being said, a tight budget that is based on drastic changes is not advised. You might consider setting a budget that suits your lifestyle and spending habits.
The budget should be viewed as a tool to encourage better habits. However, you must give yourself realistic chances of meeting your budget as it might be the only way money management can work.
Pay your bills on time
Being punctual with your bills is another great way to manage your money. By paying your bills on time each month you avoid overdue fees and prioritize essential spending. On top of that, a solid on-period payment record will improve your credit score and your interest rates.
Cook at home
Cooking at home may seem harder than ordering takeout or eating out but it doesn’t have to be. A quick stir-fry can be made with frozen vegetables, chicken breast, or tofu with nice regional seasonings.
You can also make a pizza from scratch or use the premade dough, tomato sauce, cheese, and salami. Search online for quick and easy dinner recipes, that you can make any time you feel inspired. This way, you can eat a bit healthier and save a lot of money.
An emergency fund is money that you set aside for unexpected circumstances like an urgent appointment with the dentist or auto repair.
In the event of income interruption, this fund may help you to pay your usual expenses if you are unable to work or you have quit your job.
To build a good emergency fund, you should follow the 50/30/20 rule. This rule states that everyone should use 50% of their income for necessities, 30% for entertainment and hobbies, and 20% should go to a savings fund.
You might consider buying used items
Another great way to save money is to purchase used items instead of new ones. This may not be possible for all items, but it is possible for furniture and other items. A used bookcase, for instance, will likely cost less than if you buy a new one. Used car parts are also a great option if your car breaks down and you don’t want to splurge on new parts.
Craigslist and eBay are all great options for shopping. If you need quick bucks, you can reverse the role and become the seller instead of the buyer of your old stuff.
These tips can help you save money more effectively. Managing your finances properly means you need to keep track of your spending, make a realistic monthly budget, and cut down on unnecessary expenses. If you’re still figuring out how to start saving money, follow the tips from this post to make the process easier.