Do you often run out of money by the end of the month? We know you do and we also know that you’re not the only young adult who finds himself/herself in this situation more than they should.
Money management is not a subject taught in school, even though statistics show it should be. If you don’t have a clue where to start when managing your finances, don’t worry, we’ve got you covered. In this article, we’re going to give you some of the best tips.
Lay Out All Your Expenses
First thing’s first: You have to know where your money goes. Chances are that right now you have no idea how much money you’re spending on things that are not as important as you’d think.
Create a spreadsheet and start writing down your expenses. At the end of the month, you’ll be able to notice if there are any unnecessary expenses you can cut off.
Now that you know where your money goes, it’s time to prepare a monthly budget and categorize your expenses based on their importance. For example, the rent and utility bills have to be paid on time no matter what.
On the other hand, it may not be a priority for you to buy an HD TV right now. Also, if you’re spending a lot of money eating out, then perhaps you can consider cooking at home more often and eating out only once per week. These are the sort of compromises you need to make when you’re budgeting.
It’s never too early to start saving, and it’s also never too late. One of the biggest reasons why money management is an issue for young people is the fact that they don’t save money. When you’re young, all you want to do is live in the present.
However, if the present looks something along the lines of “not having enough money until the next paycheck,” then you know it’s time to change something.
You can start by opening a personal savings account for which you set a fixed amount every month. At a later date, you can open an emergency fund. Soon enough, you’ll be on your way to starting a retirement fund or a home saving fund.
To be able to accomplish something, you need to start with a set of clear goals because they will act as a motivation for you. This applies to money management as well.
Think about what would be a priority for you right now in terms of saving money. Do you want to buy new furniture, remodel your home, purchase a car or a home, or maybe travel more? Define what actions you can make to get closer and closer to reaching your goals each month.
Always Do What Works For You
In the end, it’s all about doing what feels right for you. Take advice from others, but only apply the things that would make sense for you.
We believe that every little step counts and it usually starts with tracking your money. That’s why we built CashControl, an app that helps you manage your personal finances. If you want to start saving money, then create your free account by registering here.