Money management is simply knowing how much money you have, how much you spent yesterday and having a well thought – out plan of how you’ll spend tomorrow. It also includes your past and future savings, either with a specific purpose or a broad purpose. The skill of money management is crucial to our daily living. With it, we can alleviate ourselves of the enormous credit card debts 95% of Americans suffer from, increase our savings and be well prepared to handle the uncertainties of the future. Here are 3 simple tips about money management
Get and maintain control over your credit debt
Can you imagine spending your next 35 years paying off your credit debt? It’s clearly unimaginable, but in reality, it happens. To get control over your credit debt, you must acknowledge that you are in debt. This displays your acceptance of the situation and better prepares you to tackle it bit by bit. 3 years ago, I was in a substantial credit debt, and living in denial. Neither did I answer any calls from the credit companies, nor open their mails. The situation kept spiraling out of control, until a good friend offered to help me out, by offering advice and tips of how to pay off the debt. Bit by bit, I climb my way out of debt, and as of now, my total credit debt is just below $900. You need to acknowledge your situation, and with help from a credit counselor, develop a plan of handling the debt bit by bit. Be careful when using credit counseling agencies that have tax – exempt status, for they may not have the debtors’ best interest in mind. Remember;
– Be consistent with your monthly payment
– Avoid reaching the maximum on your credit cards
– Pay off your credit instead of moving it around
– Avoid opening other several accounts within a short period of time – say one year and lastly,
– Regularly check your credit report for errors and to detect fraud if any.
With the above steps, you will slowly but consistently climb your way out of debt.
Set up a simple savings plan
Majority of the Americans live paycheck to paycheck, and do not have the luxury of setting some small amounts aside for savings. This makes it difficult to save, as it takes the backseat to paying off bills and managing their families. However, I reason out that; it’s not the amount of money you make per paycheck. It’s about the mentality you put behind savings vs. spending. Not much harm would be caused if your paycheck comes $10 or $20 dollars less. In the same manner, if you take $10 or $20 off your paycheck and put it in your savings account and forget about it, you will be doing just fine. Better still, you can have your bank do this automatically, and in no time, your savings will grow consistent to your pay – periods. This approach seems to be working for me and can work for anyone looking to save some money for future use.
Control your spending habit
Always remind yourself of your objective, especially in regard to controlling your credit. What can be avoided should be avoided, especially luxurious and semi luxurious items. Keep in mind, it is the small amounts spend here and there that eventually add up to debts that becomes a problem to pay off. Do most of your shopping in stores such as Wall – mart that carries the same items at a lower prize, and lastly, do your shopping in bulk. That will help with budgeting as well as control your spending limit. Avoid fast food restaurants and coffee stops. Anything that can be made at home is best. Always plan before you spend.
These 3 simple tips will take you a long way and prepare you for the uncertainties of the fluctuating economy.