5 Benefits Of Managing Your Money like a pro
Money doesn’t buy happiness, but good money management will help. Taking control of your finances is important at every stage of life.
We reveal 5 pro tips that will help you be your best money manager. Our tips don’t require the years of professional training that the pro’s go through.
Follow along with our easy steps and grow your money directly to financial freedom.
Money Management Is A Life Skill
Why is managing money so important in your life? Well, the reason is simple, when you manage your money, you have a better handle on your life, as well as control and discipline.
Starting with your finances and the money you have coming in and going out sets the bar for how you will succeed in life.
For example, have you just moved out of your parents house, and are living alone for the first time in your life? Has anyone prepared you, like what to expect? Or, how to plan and save?
You might find yourself in a place of uncertainty at some point. Being smart about your finances might seem impossible, especially if you haven’t had any training or experience.
Managing your money can seem scary and intimidating. But don’t worry. This article offers tips to get you started, and even motivate you to take action.
pro tip 1: Building Your Budget
How to become your own money manager is easy, the first step is to start. Start taking control of your money is how you prepare to become your own money manager.
First, start becoming aware of the money you have and where you are spending it. When preparing your first budget, an excellent place to begin is your paycheck.
Your income is vital when preparing an overall picture of what money is available.
Second, review what fixed expenses you have. Fixed expenses are rent or mortgage payments and utilities such as electricity. Calculate all of your fixed expenses for the month and document the total.
Now you can see what is required per month that is non-negotiable.
Third, deduct the fixed expenses from your income. This balance will provide you with what you have left to pay your non-fixed expenses, an example are credit card bills, cable, cell phone, groceries, etc.
You see, you can be your own money manager; it only takes starting.
pro tip 2: Save Money
By becoming your own money manager, you’ll be able to save money. Sure, paying someone to manage your money is a great idea, but maybe you don’t have enough money yet.
They say it takes money to make money. In ways, this is true. By being your own money manager, you can find creative ways to save money and, in return, make money.
Knowing why money management is important will prepare you to save the most money. After evaluating your expenses and adjusting to the non-fixed expenses, you will have a clear picture where you can start.
Since you created your budget, now you can focus on your savings. As you see, you don’t need a money management company to work for you, and you can be your own money manager!
Let’s now see how you can start saving towards your future.
pro tip 3: Build A Financial Cushion
Now that you have a suitable amount of money to save, creating an emergency fund for your household is an important starting point.
Some choose to put their emergency fund into a savings account, while others prefer to keep it in a checking or money market account.
Either way, you’ll need to ensure your household has enough money to cover at least six months of expenses. The Zillow Group Consumer Housing Trends Report found that 82% of consumers want to save money on their monthly housing costs by living in a home they own.
While owning a home is a goal for many, achieving homeownership is an achievement of good planning and saving.
Starting with a budget, cutting back on unessential expenses and investing in your emergency fund can help you build a financial cushion.
With a bit of self-education and knowledge, you can acquire the tools needed to build an adequate emergency fund to protect you and your family from future events that could come up.
pro tip 4: Master Your Money like a professional
Become a master of your finances, they say! After reading this article, you should feel confident that you can be your own money manager.
Do you need to hire a company of money managers to take over your finances? The answer is no. Some articles might disagree with me, but the truth is you can manage your money, and you can start taking control and become a master of your finances.
Having the right tools to be successful is necessary. But it doesn’t require substantial amounts of education and software. There are so many free budget tools to do a great job.
Professional finance companies and money managers are lovely if you have the funds, to begin with. Suppose you are like every other person out there, then you might consider taking this job on yourself, especially in the beginning.
Beginners move on to become masters of their trade. Now you, too, can become a master of your finances.
pro tip 5: Control your spending habits
Getting an idea of where and how you’re spending your money is the starting point of a good money manager. Knowing where your hard-earned cash is going is the most important job of a good money manager.
One way to get a feel for where you’re spending your money is by checking your credit card statements. Most credit cards offer online access to transactions, and this can help keep tabs on your spending patterns.
When you see how much you are spending on certain expenses, you might be surprised.
On my own budget, I started by creating categories for groceries, online shopping, restaurants, health and beauty, and clothing.
If you never tracked these expenses, you might be amazed at how much money you spend on each category. Budgeting and money management are essential skills to learn, especially if you live independently.
Look online for household budget apps to get you organized. These make managing your money a lot easier.
Let’s jump into a few of my favorite online tools for budgets.
bonus tip: Best Online Budgeting Tools
Being your own money manager, you want the best tools available. Get the latest and greatest tools to manage your money easy. Some of my favorite recommendations are:
- Best free spreadsheet for anyone: Google Sheets
- Best free smartphone app for beginners: Goodbudget
- Best overall free smartphone app: Mint
Money management is a skill that requires constant updates and attention to detail, and that is why we highly recommend taking advantage of online tools. You can achieve your financial goals easier.
My most outstanding achievement with our finances was eliminating our $170,000 of debt in 3 years by using online budgeting tools.
I have to say, if I hadn’t been able to track our expenses as easily as we did, we would not be able to predict how long it would take us to get away from the rat race and achieve financial freedom.
By the time you finish reading this article, you’ll know that becoming your own money manager is not as hard as it might seem. You now have knowledge to get your money in order, start saving and create an emergency fund to protect your future.
The unexpected does happen. Being prepared for it is your best defense. Create an emergency fund for your family before it’s too late.
A great money manager doesn’t need to be a professionally trained person that attended over four years of college. The free tools available on the internet have made managing your money more straightforward than ever before.
Now, what will you choose? We challenge you to try managing your finances for six months and track your improvements. Good luck, savers!