No matter how much or little money we have, I think we can all agree that it is important we take good care of our finances. Unfortunately, many of us use our money and handle our finances in ways that are less than optimal, sometimes because we simply don’t know better, and sometimes because we are so busy living in the moment that we don’t think about the future.
If you’re someone who wants to be on top of your finances and make wise decisions that will see you well now and in the future, but you don’t know where to start, here are some smarter ways to manage your finances.
Create a budget
It’s financial planning 101, but it’s surprising how many people still do not have a budget and spending plan. When you don’t know how much you have coming in and going out, and you don’t have clear limits on your spending it is so easy to spend too much, get into debt or throw your money away on pointless frivolities that if you do nothing else, you should draw up a budget and spending plan immediately.
Pay off costly debts first
When you have debts, especially if you have a lot of them, it’s tempting to pay off only the minimum on each card or to evenly distribute the amount of money you have available for paying down debts. However, if you want to start seeing progress, end up paying less interest overall, and get on top of debts once and for all, you should aim to pay the minimum on each debt, PLUS an additional payment of however much you can afford to the debt that’s accruing the most interest.
By doing this, you can pay off your most costly debt faster, and then plow the money you were spending on that into paying off your next biggest debt and so on. Eventually, you will be able to get out of debt completely, and you should aim to keep it that way!
Invest in your future
One of the best ways to spend your money right now is by investing it in your future. Whether you buy a property, invest in stocks and shares, or put it all into a retirement plan, you should be investing as much as you can today into a better tomorrow because we never know what is around the corner and having a financial cushion to fall back on is only ever going to be a good thing that will help you out of many a financial bind.
Work on your marriage
This may seem a little out of left field, but if you are married, one of the smartest things you can do for your finances is to stay married! Married people have double the amount of assets at the point of retirement than singletons and live on a quarter less than them on average. Not only that, but divorces can be pretty expensive in their own right. So, spending the time and effort, and money if necessary, to work on your marriage could be one of the best financial not to mention personal, decisions you ever make!
Be smart, be better off!
Photo by Polina Tankilevitch