How To Manage Your Finances To Become MoneyWise
The biggest benefits of effective money management is being able to reduce debt and increase savings.
When it comes to money management you would be well advised to implement these tips in the face of higher taxes, inflation and less disposable income.
Being money wise does however take a certain amount of self-discipline.
Clearly the many people who are drowning in debt do not exercise self-discipline or any sort of prudent money management and will be destined for a life of misery unless they stop making bad money decisions & become money wise.
Most of us know that to avoid debt & create wealth we need to spend less & save more.
So when it comes to your personal financial management there’s no rocket science behind it.
You just need to know how to manage your finances and exercise self-discipline when it comes to spending money on bright shiny objects.
Part of the problem is our need for instant gratification which means that when you see something you want, the temptation to buy it is so strong that thoughts of managing your money fly out the window & you spend your money without a second thought.
The trick to being a disciplined money manager is to commit to future personal financial management goals that you cannot easily change.
5 Healthy Habits For Effective Money Management
It’s best to commit to managing your money more effectively when you’re in a positive frame of mind when your resolve is high & ensure you cannot change these decisions easily once temptation kicks in.
So when you are feeling positive & determined to change your personal financial management style do the following:
- Cut up your store cards – you can do without them & applying for new ones will be a hassle & should remove the temptation
- In order to pay off an account, or debt, in a certain amount of time, set up a debit order which goes off on the date your salary goes into your account so that you cannot use that money.
- Set up a stop order that takes transfers money from your salary straight into an interest bearing savings account before you can spend it.
- Increase your pension or RA contribution by 2% with your next salary increase. You’ll still enjoy more disposable income from the salary increase but the extra 2% savings will be a massive boost to your retirement funding.
- Any savings plan or investment should have a built in 10% escalation to maximise the growth
Lastly, effective money management isn’t just about exercising self-discipline, but also saving money to realise the enormous growth of your money through the power of compound interest.
Use these easy money saving tips to help you pay off debt and create future wealth.