1. Track your spending to improve your finances.
If you don’t know what and where you’re spending each month, there’s a good chance your personal spending habits have room for improvement.
Better money management starts with spending awareness. Use a money management app like MoneyTrack to track spending across categories, and see for yourself how much you’re spending on non-essentials such as dining, entertainment, and even that daily coffee. Once you’ve educated yourself on these habits, you can make a plan to improve.
2. Create a realistic monthly budget.
Use your monthly spending habits, as well as your monthly take-home pay, to set a budget you know you can keep.
There’s no use setting a strict budget based on drastic changes, such as never eating out when you’re currently ordering takeout four times a week. Create a budget that works with your lifestyle and spending habits.
You should see a budget as a way to encourage better habits, such as cooking at home more often, but give yourself a realistic shot at meeting this budget. That’s the only way this money management method will work.
3. Build up your savings—even if it takes time.
Create an emergency fund that you can dip into when unforeseen circumstances strike. Even if your contributions are small, this fund can save you from risky situations in which you’re forced to borrow money at high-interest rates or possibly find yourself unable to pay your bills on time.
4. Pay your bills on time every month.
Paying bills on time is an easy way to manage your money wisely, and it comes with excellent benefits: It helps you avoid late fees and prioritizes essential spending. A strong on-time payment history can also lift your credit score and improve your interest rates.
5. Cut back on recurring charges.
Do you subscribe to services you never use? It’s easy to forget about monthly subscriptions to streaming services and mobile apps that charge your bank account even when you don’t regularly use these services.
Review your spending for charges like these, and consider canceling unnecessary subscriptions to hold onto more money each month.