The topic of money affects us all. Whether we’re saving for something special or trying to make ends meet, money plays a big role in our lives. But managing money can sometimes feel like walking on thin ice.
To help you manage your finances better, we have explored 16 tips that will improve your money management.
1. The 30-Day Rule
The 30-day rule is a technique whereby you hold off on purchasing any item you want to buy for 30 days. During this period, consider whether you truly need it. By implementing this rule, you give yourself a cooling-off period to make more rational decisions about your spending.
If you still genuinely need the item after 30 days, you can buy it. However, you’ll likely find that many things you thought you wanted to lose their appeal after some time.
2. Envelope Budgeting
With envelope budgeting, you allocate specific amounts of cash to different spending categories like groceries and entertainment. Then, you allocate an envelope for each category and put the designated amount of cash into each envelope at the beginning of the budgeting period.
Throughout the month, you only spend the cash in each envelope for its designated category. Once the cash in an envelope runs out, you stop spending in that category until the next budgeting period. This method helps you visually track your spending and prevents overspending.
3. No-Spend Weekends
A no-spend weekend is a strategy for saving money by refraining from spending money throughout the weekend. During such weekends, you commit to not spending any money on non-essential items and activities from Friday evening to Sunday night.
During a no-spend weekend, find free ways to enjoy your time. These could include hiking, exploring local attractions, and picnics in the park.
4. The Cash-Only Diet
Using cash exclusively for your purchases rather than relying on credit or debit cards can also help with money management. For this strategy, withdraw a set amount of cash from your bank at the beginning of each week or month. This cash represents your budget for discretionary spending like groceries, dining out, shopping, and entertainment.
The cash-only diet encourages mindfulness and accountability in spending. Unlike cards, cash transactions provide a tangible reminder of the money leaving your possession, making you more aware of your expenditures.
5. The 52-Week Savings Challenge
This strategy helps you build up savings over the year. Each week, you deposit a specific amount into your savings account, which corresponds to the week’s number. This means $1 in week 1, $2 in week 2, $8 in week 8, and so on until you reach week 52.
By following this incremental approach, you gradually increase your savings contribution over time. If the amounts become too challenging towards the end of the year, you can start with higher amounts or modify the schedule to better suit your needs.
6. Bi-Weekly Mortgage Payments
Instead of making one monthly mortgage payment, you make half of your monthly mortgage payment every two weeks. Start by dividing your monthly mortgage payment in half. Then, make a payment equal to this half amount every two weeks. Since there are 52 weeks a year, this results in 26 half-payments, or the equivalent of 13 total monthly payments per year.
By making bi-weekly payments, you make one extra monthly payment each year compared to the traditional monthly payment schedule. This additional payment goes directly towards reducing your principal balance.
7. The 1% Savings Challenge
When following the 1% savings challenge, you commit to saving 1% of any income you receive, whether from your paycheck or other sources. Over time, these small contributions add up, helping you build a healthy savings habit without feeling overwhelmed.
As you progress, you may be motivated to increase your savings rate beyond 1%. However, the beauty of this approach lies in its simplicity and accessibility.
8. The Reverse Budget
As the name suggests, the reverse budget approach focuses on saving first and then spending what’s left. It starts by setting aside a predefined amount of savings and investments and then allocates the remaining funds to various expenses.
This method encourages a proactive approach to saving and helps you prioritize your financial objectives.
9. Round-Up Savings
Round-up savings is an automated way to save money on everyday purchases. When you use a debit or credit card linked to a round-up savings account, the transaction amount is rounded up to the nearest dollar or any other predetermined increment.
The difference between the rounded-up amount and the actual purchase price is transferred from your checking account to your savings account. For instance, if you buy a coffee for $2.50, the transaction will be rounded to $3.00, and the extra $0.50 will be transferred to your savings account.
10. Meal Preps
Meal prepping helps you manage your food budget and save time during the week. To use this strategy, set aside time to plan and prepare meals for the upcoming days. You decide on the meals you want to make for breakfast, lunch, and dinner throughout the week. As you do this, take into account your schedule and dietary preferences.
Next, create a shopping list based on the ingredients needed for your chosen recipes. Once you have all the ingredients, dedicate a block of time to cook and assemble your meals. This could involve batch-cooking large quantities of food and portioning it into individual containers for easy storage and reheating.
11. The Dollar-Bill Method
The dollar-bill method is a tangible, visual way to track and control your spending. Every time you receive a paper dollar bill as a change from a purchase, set it aside and don’t spend it. Continue accumulating these dollar bills by storing them in a container or envelope.
Periodically, such as at the end of the week or month, you count the accumulated dollar bills. The money you saved in dollar bills represents the discretionary spending you avoided over that period.
12. Snowball Method
This debt repayment strategy focuses on paying off debts incrementally, starting with the smallest balance first. To use this method, list all your debts, from small to large balances, regardless of interest rates.
Next, make minimum payments on all debts except for the smallest one. You will then allocate any extra funds toward paying off the smallest debt.
Once the smallest debt is paid off, apply the money you were putting toward it to the next smallest debt.
13. Track Your Expenses
Tracking your expenses helps you know where your money is going and areas where you are spending unnecessarily. Start by recording every expense you make, whether a cup of coffee or a bill payment. You can track your expenses using mobile apps, spreadsheets, or pen and paper.
Review your expenses regularly to monitor your spending habits and identify patterns or trends. This can help you make more informed financial decisions and set realistic budgeting goals.
14. Set Up Automatic Transfers
Automatic transfers help you prioritize savings and work towards your financial goals more effectively. First, decide on the amount of money you want to save and the frequency of your transfers. You can transfer a fixed amount or a percentage of your income.
Now, set up automatic transfers from your checking account to your savings account. Choose a schedule that works for you, whether it’s weekly, bi-weekly, monthly, or any other interval.
15. Have a Financial Vision Board
A financial vision board is like a visual roadmap for your money goals. Create a bulletin board or a poster where you can pin or paste pictures, quotes, or other inspiring items related to your financial goals. This could include photos of your dream home or symbols of financial freedom like a stack of cash.
Every time you look at your financial vision board, you’re reminded why you should manage money more wisely. It serves as a constant reminder of the bigger picture and helps you stay on track, even when faced with setbacks.
16. Avoid Money Toxic Thoughts
Steer clear of negative attitudes or beliefs about money that can hinder your financial success. Instead of dwelling on thoughts like “I’ll never be able to save enough” or “I’m bad with money,” focus on adopting a positive mindset.
Replace negative thoughts with affirmations like “I’m in control of my financial future” or “I can manage my finances wisely.” Reframing your thoughts in a positive light helps you cultivate a healthier relationship with money.
Read More From Us – 17 Movies With Zero Expectations That Blew Us Away
Never judge a book by its cover. You can say the same about movies.
Some of our favorite films are the ones we went into with no expectations. Despite this, they blew us away from start to finish.
17 Movies With Zero Expectations That Blew Us Away
Read More From Us – Classic 80s Movies Better Than Anything Released Today
The 80s was an incredible time for film. From award-winning cinema to hilarious comedies and everything in between, there was something for everyone to enjoy.
Thankfully, many of these 80s movies still hold up today. I regularly find myself watching these beloved 80s movies more often than modern cinema.
