Four Simple Ways To Manage Your Finances And Live Better

My mother was an astute saver. The need to balance what little income she got against the general upkeep of my family forced her to take up that necessary skill. I learnt what I could from watching her. She spent very wisely but she did not teach me how to invest, how to make ends meet when I was in between jobs or how to save up for an early retirement. Looking back, I can see how her experiences sheltered her from understanding the need for these. She could not teach what she did not know.

In the past few years, I have grown considerably. I have adapted my experiences to match the demands of our ever changing society and like her, I have been forced to pick up several skills of my own.

I have found that while you may not always have enough money, knowing that you have the mental capacity to properly allot what you have and take care of your needs daily is one of the best ways to feel financially secure. The fact that you didn’t learn good financial skills in school doesn’t mean that you can’t learn them now. So, here are four (tried and tested by me) simple ways to manage your finances and live better. 

Prepare A Comprehensive Budget

One of the best ways to manage your finances is by preparing a comprehensive budget. The first thing you need to do is to write down how much money you receive from your salary, bonuses, benefits, reimbursements and any other sources. 

Do you have more than one source of income? 

How regular is your income flow? 

Compare all that with all of your expenses then identify things you absolutely cannot do without and things you really do not need. Preparing a visual comparative analysis like this, helps you allocate your resources to the things that matter, as well as, cut down unnecessary spending. It is extremely important to have a good budget because it, not only helps you identify areas to save (such as on your cell phone plan) but also, builds your sense of financial responsibility. Knowing the strength of your pockets in this way can nudge you into making the little changes that matter like planning your own meals and groceries to avoid takeout lunches or last-minute ordering in. The 50-30-20 rule sheds more light on how to categorize your expenses based on income, immediate needs and wants

Make The Most Of Your Workplace Plans

 Find out the existing plans in your office and take full advantage of the good ones.

Workplace plans exist for a reason but many of us fail to take full advantage of it. It wasn’t until my fifth month at my last job that I was made aware of the existing savings plans for the employees. I enlisted in one such group savings plan and the dividends I received helped tide me over during one of the most financially challenging times of my life. Find out the existing plans in your office and take full advantage of the good ones. They could be group retirement plans or matching savings programs, but most of them will reduce your taxes and out-of-pocket expenses and gift you with flexible spending accounts and health benefits you wouldn’t have had otherwise.

Consider Adopting An All- Cash Expenditure Routine

Another simple trick I employ from time to time to better track my spending is to go on an only-cash expenditure routine. Put differently, I stash my credit cards out of sight and rely only on cash at hand for days at a time. This way, I eliminate from the mix those little online shopping sprees I sometimes embark on and I force myself to spend on only necessities at a time. It also helps me to better access my spending on a quarterly basis to see if there are ways to cut back and put more money into savings or any existing debt repayment.

Be Aware And Spend Mindfully

Whenever I visit the grocery store or the open markets, I always go armed with a list of the things I need and their estimated prices. Without this list, I tend to shop sporadically and my money quickly evaporates; this is one of the best ways to manage your finances. Admittedly, it takes some effort to compile a list and closely examine the price tags on the products you wish to buy, but it makes a huge difference in your finances when you do.

You may be armed with all the many ways to manage your finances but at the end of the day, money management, as like all things worthwhile, requires commitment. You need to be consistent. You can’t successfully save money only “when you feel like it” any more than I can’t lose weight only by occasionally eating less, because. With such a mindset,  the chances that you will revert to your old habits become increasingly high.

You can improve your financial situation, but to do that you need to start. And when you do begin, you need to stay the course.