Monday, January 30, 2017

5 Ways to Manage Your Money

You ever pay a bill, clean your house, do your laundry, and think... wouldn't it be great if this was complete forever? Like once your house is spic and span clean, why can't it be like that for the rest of your life without having to break a sweat to clean it the following week? The same goes for paying bills. You pay utilities, car, mortgage and everything else under the sun monthly... but why can't you pay it once and be good for the rest of your life?

Well I'm here to remind you that life just can't be unicorns and rainbows. We're expected to adult in our lives, taking responsibility for ourselves, our children, our loved ones. A huge part of adulting is managing our money. I learned about managing my money when I first started working. I wasn't great at it, but I did learn a lesson or two that once it was gone, it was GONE... and how I spent every dollar determined a little bit more about my future.

As I got older, I got more strict with myself and spending habits. I thought I would share a few tips that might help you help your future as it did for me:

1. Set a budget for everything
This worked (and still works) for me like a charm! Each month, I allocate a certain amount of money towards things I know I need that month. For instance, I have a category for Food, Cleaning, Beauty Items in which I set a certain dollar amount. I keep track of every cent I spend in every category I have for the month, and if I'm getting close to the budgeted dollar amount, I know I have run out of funds for the month and will have to wait until the following month to purchase whatever it may be. On the flip side, if I don't spend what I allocated for the month, that "leftover" money gets automatically dumped into my savings.

2. Write down what you spend
The good ol' check registry worked wonders for me back in the days... until I got tired of collecting those little booklets. Then I moved onto Excel spreadsheets! I love using spreadsheets instead b/c I can digitize or hand write if I choose to. Going back to point #1, since I set budgets for various categories, I typically categorize my spending by what exactly I purchased. This helps me see where my money is going and what it's being spent on.

3. Check your bank account daily
Since I write down every cent of my spending down, I also cross reference it with what my actual online banking reads. I like to keep track myself instead of solely relying on my bank because who knows if someone charged an automatic payment to your account, or if there is some mysterious fee that is attached to your type of checking. Bottom line is that I like to see what I'm spending and ensure the bank agrees!

4. DO NOT expense it to your credit card if you can't pay it off the following pay cycle
I used to charge it to the card for every little thing back in college. Books, food, parking passes... everything I couldn't or didn't want to spend my paycheck on I would charge! Why not when the minimum payment was so minimal?... or so I thought! Looking back, the amount that I owed credit card companies was MUCH more than what I actually spent because of that wonderful interest fee that gets tackled on each month. Now, I use credit cards, but only for the benefit of cash back, keeping a good credit score, or 0 interest... AND I pay whatever I spent the following month which means it comes right out of my paycheck. Nothing owed for more than a month!

5. Put away for a rainy day
I once read that you should have at least 6 months of your salary saved in case you were to ever lose your job. You wanna make sure your house/rent is taken care of and your bills are being paid while you're looking for another job. And it's always nice to have a stash in case any type of emergency were to arise.

Becoming more and more aggressive with my budgeting has helped my husband and I in so many ways. I just wish I were this determined when I first started working!

How do you keep yourself in check with your money?

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