Money is the number one stressor for many families out there. When I was in debt, it led to many sleepless nights and fingernail chewing. I saw no way out of it until I started employing some of these money managing tips. They truly changed everything for me!
Even if you make a good amount of income and have no debt, you can still find yourself with next to no money at the end of the month. Managing money teaches you how to prioritize your spending and be wiser about how you use whatever amount of money you have.
7 critical money managing tips
Every single one of these money-managing tips is something you can do every day to completely change how you view and use your money. They’re simple, actionable, and life-changing!
1. Begin budgeting.
Budgeting is single-handily the most important way you can change how you manage your money. It’s the holy grail of these money-managing tips! It allows you to not only keep track of your spending but prioritize where your money goes so you can pay off debt and begin saving.
If you’re brand new to budgeting, you’re in the right place. Check out some of my budgeting basics to start crafting your own budget, or enroll in my free budgeting class to dive right in.
2. Automate savings and bill payments.
As a busy mom, I know how easy it is to forget about bill payments and contribute to savings. Luckily, many accounts have systems in place that allow you to automate the movement of money.
You can make saving a priority just by automating the movement of money from your checking to your savings account. This can be as little or as much as you want. Every bit counts!
Likewise, automate as many bill payments as possible, so you never miss a payment. This can include everything from the balance of your credit card to your phone plan.
3. Set up short and long-term goals.
Money burnout happens quickly. It’s easy to forget why you’re living on a budget or cutting down expenses. You need a reason to remember why you’re doing all this money work which is why it’s essential to set up short and long-term goals.
Begin with general goals like getting out of debt, being financially independent, or being able to retire one day. Then, you’re going to divide them into actionable goals. For instance, you can say you’ll dedicate at least $500 monthly towards your credit card debt!
Short-term goals are also important. This provides you with quick money wins to fuel the fire! This can include saving up for an upcoming vacation or even building an emergency fund.
You want to make your goals realistic but also aim high!
4. Prioritize high-interest debt.
There are many different kinds of debt. High-interest debt is anything that is approximately 10% or higher. Most often, this includes debt from things like credit cards and personal loans. Meanwhile, you have low-interest debt like mortgages (around 3%) and student loans (2.75%-5.3%).
When paying off debt, you want to prioritize paying off high-interest debt first. This is because the interest accrues much faster than the other debt. AKA, the debt will build at a much faster rate than you can afford to pay it.
Meanwhile, you can live with low-interest debt for a long time and still reach other money goals. This can even mean investing while you still have debt. Yes! You can read more about that in my guide for investing while having debt to see if it makes sense for your situation.
5. Use credit cards to your advantage.
Credit cards aren’t for everyone, especially if you struggle with impulse spending like I once did. But when you learn to use credit cards responsibly, they can actually be an amazing money tool. I turned around my spending on credit cards, and so can you!
On our most recent vacation to Canada, we completely travel hacked our vacation using travel points we earned from our credit cards. It completely paid for airfare for four as well as a hotel in Vancouver! All because we knew how to use credit cards right.
You can find all kinds of credit cards offering incentives for travel or cash back. Find one that makes the most sense for your spending habits…while not encouraging them!
6. Check your bank balance every day.
There’s nothing worse than checking your bank account balance and being left in complete shock. I have how much in my account right now!?
It’s SO easy to lose track of your spending. Even when you budget, you won’t really have a good idea of how much money you’re actively using unless you make a point to check your account balance every day. This is easy to do by keeping your bank’s app on your phone. Check it in the morning when you do your daily social media checks (I know you do it!).
If you really struggle with spending and are new to budgeting, I suggest keeping a spending tracker. This is where you note every single expense you make to keep on track with your budget.
7. Choose the right accounts.
Based on your goals, you should have savings accounts to match them.
Besides a checking account for immediate spending money, you should also have separate savings accounts for sinking funds, retirement (like 401(k) and IRA accounts), your kid’s college (529 plans), and long-term investing. I know some people that have as many as 10 different savings accounts for each of their money goals!
Don’t be afraid to shop around at different banks to find the right accounts for you. Some bank accounts will charge monthly fees just for having a bank account open! Others might even charge you if your balance drops below a certain threshold. You can easily save money just by being careful with your selections.
That’s it! I guarantee that if you instill these 7 money managing tips into your daily routine, you’ll notice an immediate difference in how you view and handle your money.
