How To Manage Your Money Better?

By Jarin

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Last Updated: April 24, 2021

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How often do you struggle to make ends meet because you couldn’t manage your money properly? Do you really have to be an accountant or a math whiz to handle your finances better?

It’s better to limit your transactions and develop financial skills at a young age unless you want the burden of debt later on. It also has an impact on your credit score eventually. So, if you are living on allowances or salaries based on a weekly or monthly basis, it is best if you set a good financial habit.

The first thought that comes to mind when hearing about financial management is that you won’t be able to enjoy a lavish lifestyle any longer. Well, that’s not quite true. It means you are making wiser decisions regarding purchases instead of buying everything at sight. It ensures you confirm your funds for specific purposes and bring the best out of the opportunity financially.

Just because you have the money, doesn’t always mean you should buy something. The concurrent bills and expenses need to be taken into consideration at all times. In this article, we talk about managing your finances better and saving as much money as possible.

Have a Budget

Many people despise the concept of creating a budget because they consider it to be a boring process. The process of listing your expenses, adding up numbers, and making sure both sides of the ledger fall in place isn’t a fun activity.

However, it only takes a couple of hours to do so, and if you are bad at managing your money, should you even be having excuses? Try a different mindset. Instead of thinking of the boring process, why not focus on the value of creating a budget and how it may shape your life?

An hour or two a day will surely get your spending on track in no time.

Use the Budget

Some people have a monthly routine, whereas others have to make daily entries. The problem with monthly updates is that at one point you might let your budget accumulate dust in some bookshelf or cabinet.

We recommend making daily entries into your book. Mark up two pages for a day- one for whatever money you earn and the other for all your expenses. At the end of the month, you can calculate whether you have spent more than you earned or if you were able to save some cash.

You can refer to your budget to guide your spending decisions. Throughout the month, as you enter the bills you paid, you have an idea of how much money you have. In the long run, you start realizing how to save more and eventually cut down on a lot of unnecessary expenses.

If there are fixed bills you have to pay every month, for instance, rent and facilities, make sure to highlight them for your convenience. The more detailed your book is, the more colorful you make it, the more attractive and appealing it becomes.

The Rule of 3

Once you realize you have paid all the bills and have money to throw around, you’ll inevitably want to use it for some entertainment. You may want to buy a fancy shoe or that new phone that hit the market so well.

But this is where your consciousness should come into play. You shouldn’t be making big purchases every now and then. Instead, it’s best to save money for the future, perhaps an unprecedented event, rather than wasting it on something you don’t direly need.

Rather than going crazy with the leftover money, save it. You might wonder, when is the right time to spend the money then? A simple trick is to triple the price of a product you want to buy. If you think you can afford the 3x price, then go for it. If not, you should know now is not the time.

Track Your Spending

Contrary to popular belief that big purchases make you lose your money, it is actually the small purchases that take up a lot. A little money spending here and there accumulates to a grand total number at the end of the month.

Once you start putting in entries for the budget, you will be able to track your spending. A good idea is to save the receipts you acquire. After a while, you will realize where you lose the most of your money once you go through the spending journey.

If you are throwing money at restaurants, eat home more. If you are using public transport often, try taking a walk sometimes. Track your spending, and cut down the costs.

Don’t Commit to New Monthly Bills

Just because you qualify for a loan, doesn’t mean you should always take it. The same goes for bills which hardly need to make. Don’t read the newspaper much? Stop paying for it.

If you have subscribed to any website or anything in particular which you think you can live without, losing it from your life won’t affect you much. It is up to you to decide on which items you wish to spend on as monthly obligations. If you already have rents and other facilities to pay for, don’t add more to the plate.

Contribute to Savings Regularly

A good way to make a financial habit is to divide your income into several parts. We recommend segmenting it into 3 parts- the fixed bills, the savings, the expendables.

Remember when we mentioned highlighting your monthly fixed bills? You will eventually have a grasp on the least amount of expenses you have each month. Store that money aside to pay for these concurrent bills.

Next, you need to add money to your savings. Among the leftover cash, divide it into a 2:1 ratio. The larger sum of money is for your savings. Make sure you contribute to your savings every month.

The smaller amount is for you to enjoy in the said month. Once in a while, you can treat yourself by reversing the ratio.

Final Words

All these are actually easier said than done. It won’t be easy to start. But once you get the hang of it, your life will be much more organized and your finances will be better off.

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  • Jo says:

    Love your advice in many subjects. Thank you 🙏 , thank you, 😊

  • Patrinella says:

    Love your topic on money management. I am going to use this method to help me become a better steward over my finaces

    • Sarah @ Daily Motivation says:

      So happy you enjoyed it Patrinella! If you want more topics on managing money, head over to our sister site at dailyfinances.site. It's all about helping people with financial literacy.

  • Jen says:

    I did a visual yearly budget. I cut up strips of cardex about ruler size to represent $1000 of income.
    Then I wrote on cardex with fat texta/sharpie what the bill was. I worked out what things cost me per year and I blu-tac-ed them to my indoor pillar. It is a visual reminder of where my money goes and how there is not much wiggle room. It was emotionally hard to see the truth of the budget but it makes me think of all the good things that are free like self-love, loving my pet, fresh air, Walkies and hugs. I appreciate the electricity I use etc. We must live within our means ❤🏡🧠

    • Sarah @ Daily Motivation says:

      Super smart visual plan Jen, thank you for sharing with us. You're right, it IS hard to face what we are up against, but we have to if we want to make any kind of progress. I love your comment about thinking about all the things that are free. There are so many if you look for them! A good reminder for all of us to keep it simple and know what to focus on. 🙂

  • Connie says:

    I love the writings of Atomic Habits,thank you for the info. I am going to get on James Clear website I'd love to rd his book..I procrastinate it is so hard to get out of this rut..I think his readings will give me some hindset to help me get on the right track. Thank you for sharing

    • Sarah @ Daily Motivation says:

      It definitely got me out of a rut Connie, I highly recommend reading or downloading it!

  • Keisha says:

    I’ve struggled with my finances and keeping a steady budget. I realize how much not having my finances under control has been affecting my life. I work hard the last two years to achieve owning a house. I accomplished that goal. However, I haven’t been sticking to a budget and have got caught up in emotional spending. I don’t like that way, the pain of living check check. I’m working to get myself back on track to live a healthy financial lifestyle . This article was very helpful.

    • Sarah @ Daily Motivation says:

      First of all, congratulations on owning your home, that is an INCREDIBLE achievement Keisha! Secondly, we ALL need to hit the reset button from time to time, it's so easy to fall back into comfortable, and sometimes not helpful habits. But you recognize you need to make some adjustments, and hopefully get back on track before you do any real damage. That's the real trick - no one is perfect 🙂 Keep going!!

  • sherab says:

    very useful tips of saving money

  • LA says:

    Hi heading into retirement zone.
    Falling short.The end results keep me looking at continue working till…70
    Budgets work but tight end monthly bills has trapped me from saving.I am now seeing my mistakes pieces of puzzle not fitting.I want to save more but I tend to have less left over each time.Thank You for your guidance.

    • Sarah @ Daily Motivation says:

      A lot of people are worried about retirement, LA. If you are looking for more specific information, check out our sister site, Daily Finances - we have a lot of articles on retirement, budgeting, planning, etc. Wishing you luck!

  • PD says:

    I was always told to figure out monthly expenses then calculate what you can save by paying yourself. I can fortunately automatically fund 3 savings accounts. 1. For traveling 2. Xmas club which has an annual distribution on 11/2.
    (now used to pay my semi-annual car insurance pmt) 3. Regular savings for unexpected expenses. These pmts as well as my mortgage/HOA are setup as monthly deductions. The majority of my bills are paid automatically, therefore I fortunately have a credit score in the 800’s and I consistently score 100% for on time pmts. Long road for this widow but determination will get there. Oh, distinguish between your “wants “ and “needs.”

    • Sarah @ Daily Motivation says:

      GREAT advice, PD! Sounds like you had a solid plan and stuck to it. Very inspiring for everyone getting started or looking for success stories!! 🙂

  • Bob Wileman says:

    Working during retirement is not so bad. I have been doing so for the last 15 years. It gives my life a purpose and overcomes any tendency to idleness and isolation.

    • Sarah @ Daily Motivation says:

      Thanks Bob. 'Retirement' looks different now than 20 years ago. For some it means retiring from the 'forced' work of a traditional 9-5, and a transition into a more selective way to spend your time, whether that's on a golf course, traveling, or continuing to work in a way that suits your income needs and emotional/physical/social needs. A lot of people look forward their whole lives to retiring, and then don't know what to do without that purpose you speak of.

  • Sozie Barnet says:

    Love it,love it,I really love your advice on how to manage my finances,good timing am very happy with it. Thanks a lot for the enlightening.

    • Sarah @ Daily Motivation says:

      Awesome to hear Sozie!! Every bit of advice can help when it comes to your finances. We're wishing you well!

  • Happy says:

    Thanks for your financial management plan. I am going to apply it for my life .

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