In these times of severe economic crisis, mastering personal money management has become more important than ever. You should make sure that you draw up a personal financial statement at least once a year to check your finances. You can easily calculate your financial worth by summing up the total value of your assets and subtracting your liabilities from it.
How to manage money effectively
Given below are a few simple tips to help you get forward with managing your money effectively.
- Open a bank account somewhere you can go for more than just one financial relationship. This can be a savings account, checking account or a personal or auto loan.
- Direct deposit is a great way in which you can put a check on your spending. When you cash in your check, take advantage of this scheme. If you do not have money in hand, you will not be as tempted to spend it.
- One of the oldest and most effective ways is to pay yourself first. Every month, set aside at least 10% of your wages. Over time, this will accumulate into a good amount, which you can then invest to get better returns.
- Set up a monthly bill paying system. Whenever you receive a bill, review it and note it down into your calendar. Make sure that you pay your bills on time in order to avoid fines for being late.
- Request a copy of your credit report. When you get it, examine it to see if there are mistakes. An inaccurate credit report can have a negative impact on your overall score, so if there are inaccuracies in your report, get it corrected right away. This is especially necessary before making a large purchase like a home mortgage.
- Seek professional help before ruining your credit. This can include cutting costs to save money, looking for sources of additional income to pay off your debt and even seeking advice from professionals if you cannot do it on your own.
- Try and restrain your ‘see it, spend it’ attitude. Make sure you buy only what you need and not everything that you want. While shopping, look around for the best prices and spend in a disciplined manner so as to be able to save more.
Those were a few tips to help you with your goal of effective personal money management. Keep these tips in mind to help you get the best value for your money.