It’s payday! The best day of the month as for all of twenty minutes, you feel flush again. There is more than just the basic amount in your bank account for groceries that week. For most families, when payday rolls around, there are only a few short hours of enjoying a nice, healthy figure before the bills snatches most of it away. Mortgage payments, utilities, insurances, groceries, phone payments – you name it, your pay check is drained by it. It’s a sad situation to be in, but it’s one that most people find themselves dealing with at the end of the month.
College graduates and highly educated people can be just as frivolous with their money and have no idea about money management as someone who hasn’t got a PhD. Money management isn’t one of the things that gets taught in high school and college, which is unfortunate. Knowing the mitochondria is the powerhouse of the cell isn’t as important as understanding how to balance a check book and how to pay taxes in April. With the fact that most people don’t know how to get from one pay check to the next with a decent balance means that understanding how to manage money is more important than ever. The way you spend your cash, invest your cash and manage it can have a huge impact on how you live your life. Budgeting, investing and even how credit cards work are things that people need to learn, but never seem to.
So, what we’ve done is put together a guide to money management, so that you understand what is and what isn’t important to be paid at the end of each month. There are a few golden rules for your personal finance, and as long as you understand these, you can do more with your cash.
Do Not Live To Your Means
One of the biggest golden rules for your finances, is how you spend it if you take home $4,000 a month, you absolutely should not be spending $3,900 of it on payday. Spending less than you earn can make sure you live a balanced month and have a disposable income that you can choose to spend on savings, investments, or simply carry it through the month. Your income each month should comfortably cover you for mortgage or rent payments, utilities, insurance, groceries and cell phone bills at a minimum. On top of this, you have to be able to cover your car payments, gas and any social outings. Managing your money with a budget that is affordable is the only way you can move through the month comfortably.
Always Use Comparison Websites
For things like insurance, Affordable Life USA and other comparison and affordable websites can help you to choose where you spend your money on insurance. You want to get the best coverage that you can while at the same time not spending half your pay on insurance. You can also use comparison websites for your utilities and groceries so that you can get the best deals all round, saving you money each month. You’ll likely be able to see your own spare cash rising and you can put the excess into savings each month. By cutting down your outgoings for each of your financial commitments, you can be more efficient with the leftover money. If you’re someone who prefers to spend a few hundred dollars a month on groceries, then it may be a good idea that you swap brands. Go for the supermarket brand instead of the big brand names and you can get the same product for less.
You need to think of your future while you’re planning your monthly outgoings. Planning for your retirement is as important as planning out for the next week. You need to think about how you plan to live once you get to pension age. Paying into a savings account purely for retirement or a pension pot that’s untouchable until you leave work is not just budget smart, it’s life smart. You can also plan ahead for your current financial commitments and make sure that when you sort your car out, you can afford the insurance.
You don’t need to be a stockbroker to be able to invest your money. It doesn’t have to be the stock market either! The rich get richer, and that’s because they invest their money wisely and it builds while they sleep. Money that is invested properly grows over time and you can save yourself a little nest egg without much effort. Your future matters and you shouldn’t put it on the back-burner just because times are tough. Investing money in a high interest account or even in precious metals can give you a sound return later on.
If you have a low paying job and don’t have the qualifications to climb the ladder the way you always wanted to, then you need to have a rethink on where your life is going. Checking out local colleges and night schools to see what help is available for courses to help you better yourself is the best way to go, with education often making the difference between whether you do well in your financial offerings or not. You are often told at school that your education maps out your entire life, and this is true. There are only so many jobs you can get without a decent education.
Sure, you can work as a junior in a company and work your way to the top, but this doesn’t take half as long if you have a good, solid education. Invest in yourself – go back to school and get the qualifications you need to make a difference in your own life.
How you manage your money will dictate your ability to live day to day – don’t sell yourself short! Shoot for the moon and be savvy about your monthly outgoings. The more you save, the better off you’ll be in the long run!