How To Manage Money

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HOW TO MANAGE MONEY - AVOID THESE MISTAKES

1. Not Having A Plan - Spending or Otherwise

"Where has all my money gone?" is a question that we most frequently ask ourselves. This happens because of our reckless day-to-day spending habits, as we try to take care of our needs and wants. This is where a personal money management program could help us spend our money more wisely, while showing us where the money went to.

All it takes is one afternoon, just gather up all your bills and write down your expenses. Take a critical look at your expenses and weed out the ones that are needs from the ones that are wants. And then you will begin to get a picture of how much you earn, what you do with your money and where you waste it. Remember, in the end it's what you do with your money that counts!

2. Not Having A Nest Egg

Most money management experts suggest that every family create an emergency fund. Your fund should have the equivalent of three to six months’ salary. For most, this means learning discipline along with developing good saving habits. An emergency fund could make a big difference when unexpected expenses arise.

By having this savings account, you and your family gain a greater feeling of security and the peace of mind that goes with it.

3. Not Budgeting For The Extras

We tend to forget about the extra expense of the things we own like a car or home. Sure we take into consideration the monthly payments of ownership, but we forget to include the cost of thing like: maintenance, repairs, operating expenses, insurance etc.

4. Spending Extra Income

Most of us have our tax refund spent before we even receive it. This is a common thing to do when you receive a bonus, raise or tax refund. We take the extra money and spend it on some form of luxury item instead of putting it to better use. Like paying a debt down, adding to our savings account or on a major repair that we have been putting off.

5. Failing To Prepare For Large Yearly Expenses

How many of us find ourselves short on cash and staring at that large bill. We know it comes once a year, every year. Prepare for this by simply taking all bills that require a yearly payment, divide total amount due by 12. Put this amount away each month and you won't have to worry about finding cash to pay these types of bills.

6. Credit and Credit Cards

In the right hands credit can really help you, but for most it is big trouble. The buy now, pay later mindset creates problems by allowing families to go overboard with their spending, thus bring about payments that are larger than they can handle.

And to make matter worse, most do not understand the terms and fees associated with the credit charges. And in most cases is not figured into their budget, which is a big surprise when the bill comes. So don't take on more than you can handle and pay on time to keep a good credit rating.

7. Impulse Buying

We all buy things that we think we need when it's really just something we want at the moment. All these little things add up and contribute to our question "where did all the money go?" This is where a good personal money management program comes in handy. Just enter every cent that you spend for the week and you'll get a good look at where you waste your hard-earned cash. Learned to curve this impulse buying!

8. Not Living Money Wise

Living in the moment, when it comes to spending money is a dangerous thing. As we tend to spend without thinking that we may need that money later on. So remember this one important thing; live within our means. Learn the difference between a need and a want, apply a little discipline and you will get ahead in the money game.