When you think about the challenges you face in your life, it’s amazing how many of them are tied to money. And then, when you dig deeper, you’ll be amazed at how many of these money-related challenges would be solved not necessarily by making more money but by better managing the money you already have.
This isn’t to say that all of the world’s problems will be solved if you can just balance your budget, but it is likely to reduce the stress you feel on a daily basis — and really, who could say no to that? So to help you manage your finances and reduce the obstacles you face, apply these tips today.
* Map out your budget. Most people have a rough idea of how much they make on a weekly basis, though many have never recorded how much they spend. To manage your budget, chart how much you make each week and record how much you spend each week over one month to create an average. Then compare the results. The greater the difference between the spent amount and the earned, the better.
* Separate your expenses. Expenses can be divided into two categories: those things you must spend money on and those you like to spend money on. Once you’ve figured out your weekly earnings, subtract the bills you must pay (rent/mortgage, utilities, food, etc.) and then set 20 percent of your total income aside for savings. The money you have left over can then be enjoyed for discretionary spending.
* Keep credit card spending to a minimum. If used improperly, credit card spending can be hazardous to your budget’s health, so try to use your cards as little as possible. A credit utilization rate of 7 percent will improve your credit score and protect your budget from a surprisingly large credit card bill at the end of the month. The less money you have to pay in high-rate interest, the better.
* Strive to save. There’s a better price out there, you just have to look for it. A quick Web search for the product of your choice is a great way to compare prices, and don’t discourage discount shopping. Subscribing to your favorite brand’s email lists can be your gateway to special deals. And be on the lookout for coupons — they can offer surprising savings when you least expect them.
* Embrace direct deposit. Sometimes the best thing you can do with your money is to take it away from yourself. If your company offers direct deposit, use it. It’s a great way to transfer your paycheck directly to your savings account without having to make the trip and do it yourself. And when you do this, you can also support your 20 percent savings goal without noticing the money is gone. It's the no-stress solution to better savings. Who could say no to that?