Many people struggle with their money.
I’m guessing some of that is because they make managing their money more difficult than it needs to be. After all, if you’ve tried to use a complicated budgeting program like Quicken, it’s easy to get confused and lose interest. That’s because using a system like that doesn’t teach you how to manage your money, it just teaches you how to use their software. Of course it spits out lots of great charts and tables, but if you have trouble understanding them, then what use are they?
If you find yourself in the position I just described above, it could be that you need to simplify your financial management. Here are some ideas that we think can help you do a better job. We’ll also share some ideas we found from other blogs below, to help give you a better point of view on this subject.
Simple Money Management Techniques
Keep Your Finances Organized. The most important single thing you can do to help you manage your money better is to keep your finances organized. By just making a simple spreadsheet like we discussed in our previous post, you can not only organize your finances, but you can avoid overdrawing your accounts, use it to make a budget, and complete your taxes more efficiently because all of your information will be easily sortable and clearly labeled.
Start Using Debit Cards or Cash. Using credit cards to pay for everyday expenses can become a very bad habit. When doing so, it is too easy to spend more money than you are making, and quickly fall behind financially. Instead of using credit cards, try using cash to pay for things. You won’t get the reward points, but you’ll likely spend much less. If you think carrying cash around is silly, then use your debit card. Just make sure you track your spending on the spreadsheet we mentioned earlier. Both of these methods prevent you from spending more than you make.
Restraint. One of the best things that you can do to help control your money is to use restraint. Try to nip any impluse spending, or spending based on emotions. Use a simple technique whereby you don’t buy anything the first time you want it. For example, if you’re at Costco and you see some gadget or tool that you want. Don’t buy it on impulse. Instead, wait until you go back to the store and see if you still feel its worth it. Many times your spending will change depending on your current emotions. It’s very easy to buy things to try to make you happy, but they often lead to buyer’s remorse.
Frugality. Everyone can use a little frugality. Not only will it help you spend less, but it is also the best way to help the environment. By using less resources, recycling used products and even repurposing old stuff you can do a lot of good, for both your wallet and the earth. Being frugal doesn’t mean you live like you’re poor, it just means that you pay attention to wasteful spending.
What Other Bloggers Are Saying About Managing Money
As part of learning process, we search around the web to see what others are saying about the topic we are discussing. Here is an excerpt from an article on Bright Knowledge’s blog.
Separate what you need from what you want
There are some things you can’t help but spend money on, like accommodation and food. Separating these needs out from things you just want can help you to understand how much money you have and avoid overspending.
The first step is to work out how much your needs will cost you. This is usually easier than putting together a full budget, as your needs vary less from month to month. It in
Once you’ve done that, you can work out how much money you have left over, and make sure you don’t spend more than that on wants like going out or buying music. You can make this easier by separating out the money you allow yourself to spend on wants. For example, you could withdraw the cash from your bank account at the start of each month. That way, you can see how much you have left to spend on luxuries and you can’t accidentally go over your budget.
Read the rest at three simple ways to manage your money.
While reading an article at Money Management International, they make an interesting analogy about how managing money is based on your focus. If you focus too much worrying about your debt, your debt will become the problem, or something like that. Here is exactly how they compared money management to race car driving:
There is an interesting concept taught to race car drivers that also applies to consumers trying to reach their financial goals. One of the things drivers worry about the most is hitting the wall during the race. Trainers instruct their drivers to focus on going straight and maintaining speed, and that avoiding the wall is inevitable. People who focus too much attention on “hitting the wall” often find themselves in the position they feared most.
The same can be said about focusing too much on debt and other obstacles hindering financial success. Instead of focusing too much on the possibility of failure or ‘hitting the wall,’ concentrate on reaching financial freedom.
Find the rest of this article at Focus on financial freedom instead of debt.
Some interesting advice here. Most people that need help managing money can probably help themselves. Hopefully, reading advice like this is motivation to get started.
Do you have anything motivating to say about managing money? Please share.