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How to Effectively Manage Your Money

Knowing the basics of money management and how to make it work for you will give you great financial freedom and relief.  However, managing one’s finances seems to be a more difficult task than most are prepared for.  There are a number of resources available to help you better manage your finances but resources can only help you so much.  Here are some easy ways to simplify your expenses and manage your money.

Get Organized

The first way to begin your journey on the road to financial freedom is to become organized.  Keep all of your bills and receipts in paper form and if you can, save them electronically as well.  This includes tax records, ATM transaction receipts, purchases and of course, bills.  Organizing your receipts will help you stay on track with your budget, make it easier when it’s time for you to pay bills and know just how much money you have available.

Track Your Cash

In order to be financially responsible, you need to know how much money is coming in and perhaps more importantly, how much is going out of your account.  Begin by keeping monthly records of the income that goes into your account and then track your spending.  Keep a spreadsheet of all of your necessary monthly expenses, such as rent/mortgage, car payment, groceries, utilities and others.  Then, plan for how much of the remainder you would like to be saving each month and you’ll be on your way to a well-balanced budget.

Keep the Car in the Driveway

The cost of insurance, gas and maintenance will make your head spin.  Most don’t realize how much money they pay for their vehicles, when they need to recognize them as a major expense.  Even if you own your car outright, you are still paying hundreds a month to fuel it, let alone the cost to insure your vehicle.  If you don’t have to go somewhere, then don’t.  While owning a car may seem like a necessity, oftentimes, it can be viewed as a luxury.  If your drive isn’t a necessity, leave the car at home.

Build Your Credit

Credit cards have become a sizable issue, as most buy unnecessary things with their cards and simply forget about them.  However, credit cards aren’t controlled by genies that put money on them for you to spend and never worry about.  They represent a loan with an obligation to repay.  Whatever you do, do not spend more than you can afford to pay back.  It might be enticing to buy that new car stereo, laptop or pay that electricity bill, but if you cannot afford to pay it back (plus a little bit of interest), save up and wait to make the purchase until you have the cash to do so.  When you do decide to get a credit card, shop around for cards with low limits.  These will give you a little peace of mind knowing you have a backup in case a cost arises before your next paycheck, but also limits your spending capabilities.

Live Within Your Means

It might seem simple, but don’t buy what you can’t afford.  Even if you have the cash to buy something, you need to analyze the purchase and see if you can truly justify the buy.  Instead of eating out all of the time, pack a lunch or cook a delicious meal at home.  This will save you more than you think.  Also important to note is the cost of fast food meals.  These purchases will eat up your bank account quickly, leaving you wondering where all of your money went.

Save by Spending Smartly

One way to save you from extraneous expenses is to find inexpensive ways to entertain yourself.  Rather than go out and spend your money like cash is going out of style, visit museums, coffee shops, walk at the park, cut coupons, search the internet and check out sales racks when shopping.  If you do just a modest amount of research, you will end up saving a fair amount of money.

Protect Yourself

Identity theft and fraud are on the rise, so you need to take appropriate measures to protect yourself.  Guard your account numbers and PIN and keep your credit cards in a safe, secure location.  Buying a shredder to dispose of statements, receipts and bills will allow you to keep your account information out of the hands of those who might choose to defraud you should they come in contact with the necessary information.

Utilize Technology

With the growing number of smartphone users, companies have established tools to help you manage your money.  From Android finance apps to do-it-yourself websites, there are a number of ways you can use technology to your benefit.  Scour the web for the right tools for you.  Don’t use something that will be an inconvenience.  You’ll only use the tools available to you if they actually work for you specifically.  Once you’ve found the right tools for you, managing your money will be easier than ever.