By: Gemma Lagasca
Many people are very much bothered about money. It’s mind boggling why others have lots and some don’t have. Money management is vital because they just don’t grow on trees. Saving money for different reasons is a good sense of discipline to prepare for unexpected circumstances. This is also the key to financial stability because there’s no such thing as earning quick cash. Begin with establishing a better outlook for your resources today – to be safe from worrying about debts tomorrow. Just plan on it as follow:
- Create a monthly budget. Budgeting is one of the key factors on how to spend your money wisely. That way, you can clearly analyse your needs and you can easily keep track of your expenses. When you shop for groceries, make sure you have your list of things to buy to avoid spending beyond your limit or end up buying not so important commodities.
- Simply pay cash. Paying the groceries, utility bills and other purchases through credit cards are more convenient than paying cash but if you want to be in control with your spending, pay cash especially if you are an impulsive buyer. It will alarm you if you go beyond your budget because you’ll just run out of cash.
- Open an emergency account. Your monthly budget should include a certain amount for emergency fund allocation. This will take care of unexpected expenses. Credit cards incur interestsaside from the due payments and service fees. This will deplete your monthly budget as the charges are accumulated over time. Securing an emergency fund is a good effort for your peace of mind.
- Start saving for your retirement while you’re young. If you are on your early 20’s begin setting aside a certain amount in your savings account for your future retirement. That small savings will grow bigger in due course. The power of compounding interests will build wealth for you as time progresses. For example; a $5,000 investment of a 21 year old lad can escalate to $120,000 during its maturity period. This will ensure a comfortable life for him during his senior years – or he can re-invest the increased amount for a higher yield when his finances allow him during the peak of his career – thus resulting to substantial wealth.
- Eating outside is a major waste of money. Dining out is one of the common habits that can tear down your budget. Imagine the amount of every posh dish that can sustain the costof food allowances for few days. Learn how to cook your own food at home and enjoy a delightful dish without compromising your budget. If you want to celebrate for a special occasion outside, plan and save for it.
- Focus on your future goals as you cut down expenses. Cutting down expenses is only a part of managing your money wisely – but that’s not the end of the story yet. You should have plans and targets for certain concrete set of actions. That way, your financial management mindset is for long-term purposes – like for setting-up your business in the future, owning a dream house for your family and investing in educational plans for your children’s brighter future. Availing for financial assistance for these purposes is more likely to flourish in a long run.
Every penny counts. Spending your money wisely can do justice to your hard work and will keep you safe from investment scams promising to generate quick cash. Motivating yourself to save and plan now can mean a debt-free life in the future.
Image Source: Bankrate