More than 1 in every 5 American adults aren’t saving any of their annual income.
Whether they’re living paycheck to paycheck without any leftover or they simply aren’t thinking about their financial future, choosing to forgo money management is a big mistake.
If you’re ready to take control of your finances and set yourself up for success, keep reading to learn 7 pro money managing tips you need to know.
1. Get Your Priorities in Order
Before you can start learning smart money management tips, it’s important to be clear about why you’re looking to make a change.
Maybe you’ve decided to start saving for a big purchase, like a new car or your first home. Or perhaps you’re having trouble paying your bills each month. The reason could even be something smaller, like wanting to take a vacation or buy a new TV.
But if you aren’t clear about your priorities from the start, it can make managing your money and staying on track with the changes a challenge.
Take a look at not just what you’re working towards, but which of your current expenses are a priority.
If you’re having trouble paying your bills or need to start saving more money, you may need to make some changes in your spending habits. For some people, streaming services like Netflix and Hulu are a luxury that can be cut in favor of other expenses.
However, for others, access to your favorite shows might be important. You might choose to skip dining out or walk to work to save on gas instead.
2. Track Your Spending
While you’re getting honest about your priorities, it’s also important to start tracking all of your spending.
Most of us know exactly how much we’re spending on big bills, like rent and your car payment. But other totals, like exactly how much you’re bringing home after taxes, what your utilities are costing each month, or how many recurring subscriptions you’re paying for may be less clear.
Until you know exactly how much money is coming in and going out each month, it’s tough to make any changes.
The best way to start tracking your spending is to create a spreadsheet. List each expense and paycheck for the month. With this money management tool in hand, you can start looking for areas to save or figure out places you may be overspending.
If a spreadsheet isn’t your style, this next tip might help you find the perfect alternative.
3. Utilize a Few Money Apps
While it’s important to learn how to manage your money better, you don’t have to do it alone.
Thanks to today’s technology, there’s an endless supply of apps that can help you do everything from managing your bank accounts to setting a budget to jumpstarting your savings.
If you’re working on getting on top of your finances and planning ahead for a successful financial future, there is one type of app, in particular, that you should know about; Money Making Apps.
From apps that offer money in exchange for completing surveys to apps that help you get cashback on items you already purchase, these are a great way to make a little extra money without taking on a full side hustle.
4. Start an Emergency Savings Account
Prior to the COVID-19 pandemic, only about 40 percent of Americans had enough in their savings to cover a $1,000 emergency expense.
With many people still dealing with unemployment or furloughs, it’s likely that even fewer families are prepared for the worst.
If you don’t have an emergency savings account in place, it’s time to start one. While it can be tough to start saving when you’re living paycheck to paycheck, every dollar counts.
Setting aside even a small amount each month will add up over time. And when an emergency strikes, having even a little set aside will help to offset the effect that emergency will have on your finances, as well as your mental well-being.
5. Make a Money Plan
When it comes to tips for money management, creating and following a budget is often at the top of the list.
But following a budget isn’t always realistic.
Your grocery needs may vary widely from one week to the next. If you’re a freelancer, your income may not hold steady each month. Unexpected expenses like emergency car repairs or a high utility bill can throw everything off.
If you know that sticking to a budget will be tough for you, consider creating a more loose money plan. You can set rough goals for how much you’d like to spend on things like groceries, gas, and “fun” spending.
At the end of each week or month, check to see how close you got to your goal for each area. This can help you identify problem areas or figure out where you may be able to spend less to put more money in savings.
6. Train Your Brain to Consider Each Purchase
From late-nights spent scrolling Amazon to targeted social media ads that are constantly showing you those items you were looking at, there are always temptations to spend money.
To help you avoid temptation and stop unnecessary spending, you need to re-train your brain. Before you buy anything, stop and think about whether you really need it, or if you even want it. If possible, walk away or close your browser tab to give yourself some time away.
If you find that you still want that item hours or even days later, you can always buy it. But impulse buying more often than not leads to purchasing things you didn’t need simply because they were on sale or you wanted them at the moment.
7. Get a Side Hustle
If you’re struggling to scale back your spending or you’re still living paycheck to paycheck, a side hustle can help.
There’s a side hustle out there for every skill level and interest. You could tutor students online, sell things on eBay, or join a company like Uber or DoorDash.
Working even a few extra hours away means more money in your savings account or going towards paying down your debts.
Putting These Money Managing Tips to Work
From getting clear about your priorities and goals to making the most of money management apps, these pro money managing tips can help you take control of your finances.
For more tips on mastering the entrepreneurial mindset, check out the rest of our blog.