These money management tips can help set you up for long-term financial success and help you manage money more effectively.
When you approach money management and financial planning in a smart and efficient way, it can help set you up for a bright and successful future. Money management is more than just budgeting. There are proven methods to help you manage and pay off your debt.
WHAT IS MONEY MANAGEMENT?
Budgeting, investing, saving and even spending are all a part of money management. So how do you build money confidence and reduce anxiety about your financial goals? Finding ways to better manage your money—and your mindset—could help. You could do your own research or get professional advice to assist you with your financial plan.
HOW TO BETTER MANAGE YOUR MONEY
You can use these seven practical financial tips and money management skills as a general guide for your financial journey.
- MAKE A PERSONAL BUDGET People feeling the impacts of financial stress struggle more with budgeting—that’s one finding from the Capital One Mind Over Money study. They feel less in control and tend to spend their paychecks more impulsively.
Creating a budget is a great first step in developing healthier money habits and learning how to get the most from your money.
You can start by using a budgeting worksheet and following general steps like these:
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- Add up your monthly income. This includes your salary at your job plus other sources of income like bonuses, tax refunds or income from side work.
- Add up your monthly expenses. These can include expenses in the major “buckets” like paying bills for housing, food, student loans and transportation. For monthly payments that aren’t always the same—food and utilities, for example—you could use an average from previous months.
- Subtract your expenses from your income. This amount will be the starting place for your budget. Anything left over is what you have to work with when you’re paying down debt and building up savings. If what’s left is too small, you may want to consider cutting costs for things like takeout food and subscriptions, if you haven’t already.
- TRACK YOUR SPENDING
The Capital One Mind Over Money study found that using healthy money habits when you feel confident about your finances can help you when things get more challenging.
Tracking your spending could be one of those good habits. After all, it may help you avoid overspending and stay within your budget.
- SAVE FOR RETIREMENT It may help to start small when it comes to retirement savings. In other words, you could save a small amount every month for now, and then add to it when you feel ready. It may also help to open a retirement plan account that could supplement retirement income from pensions or Social Security.
- SAVE FOR EMERGENCIES Putting away savings in an emergency fund for unexpected life events—like needing major home repairs—may help you feel better about your financial situation. Growing your savings might be one of your goals. If it is, you may want to consider these finance tips to help with unexpected expenses.
- PLAN TO PAY OFF DEBT Paying off debt may also help you better manage your finances and reduce money-related anxiety.
- ESTABLISH GOOD CREDIT HABITS Working toward establishing good credit scores could also help improve your finances. Regularly checking your credit reports for accuracy may help too.
- IMPROVE YOUR MONEY MINDSET What you do with your money is important. But how you think about it can be important too. Taking on a more positive financial mindset while managing money could include things like keeping sight of your goals. It could also mean taking a solution-oriented approach and focusing on the things you can control—like repayment of your debts and your spending habits.