Learning about money, and money management is a never ending process. Successful money management takes time and dedication. These are the top five money management tips I learned in 2010.
The Little Things Really Add Up
The little purchases really add up over time. A dollar here or there can cost thousands of dollars a year. Justify all expenses, no matter how small.
Once you get into the mind frame that money is not valuable, it is easy to lose whatever money you have quickly.
Credit Cards Are Dangerous
Credit cards are very dangerous. Even if you have a credit card and pay it off every month, you can still be getting in trouble using a credit card.
A credit card gives you the illusion that you have more money than you actually have. Unless you have perfect self-control, you should avoid using a credit card.
They can be good for emergency funds, or other temporary needs. But making credit card usage a habit, is a dangerous path to take.
Download Your Financial Data
Many banks allow you to download all of your transaction data. Take advantage of these features.
I recommend Excel. Excel takes a little getting used to, but it is a powerful tool. There is a reason it is the standard in spreadsheet programs. It is also very flexible, and most banks will download your financial information directly in the spreadsheet.
The time frame that banks will allow you to download you data vary wildly. Some banks will allow you to download data for 10 years, and others will cut you off at 3 months. Check with your financial institution to know what time period you have for downloading data.
Backup Your Financial Data
Always back up your financial data. I have an external hard drive, where I back up all of my important data. I back up my data every week.
Hard drives crash all the time, and computer restoration services start at $500.
Keep your important documents on a $100 external hard drive. It is well worth the investment and peace of mind.
Use Bill Pay
Most banks offer free bill pay. Take advantage of this feature.
Set up bill pay with your bank. You can see the history of bills you have paid, and see the pattern in the bills. For example, if I was reviewing my cell phone bill and saw they were $100, $101.03 and $115 I would know I was probably charged a fee for something.
I can also check and make sure I have paid all of my bills in one place. It is a great way to stay on top of your bills, and make sure they get paid on time.