How do the words financial management make you feel? If there is one thing in life that leaves more people feeling more anxious and worried than just about anything else, it most certainly has to be their finances.
Money, whether you like it or not, really does make the world go round and there really isn’t much any of us can do about that.
All we can do is to try our best to find ways to benefit from that fact.
Financial management and financial planning are skills everyone can benefit from. However, if you don’t already know what you are doing, it can be difficult to get started.
I talk a lot about budgeting and smart ways to save, and you can never be too prepared when it comes to your finances.
Managing your finance comes with its own challenges, and even greater for freelancers and entrepreneurs who have multiple streams of income.
Of course, there are always things that you can do to try and reduce the stress that money brings into your life.
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With that in mind, here are a few ways that you can start being smarter with your money.
9 Financial Management Tips To Feel Good About
Below are a few financial planning tips to help strengthen your finances.
But first, make sure you sign up to access the HerPaperRoute Toolkit, which is packed with money saving and money making resources. It’s free!
Free Budget And Retirement Savings Planner
Before we begin, here’s your free copy of the budget planner. Use this to help you pay off debt and save for retirement for years to come.
The most obvious way to start being smarter with your money is by saving as much as possible.
A lot of people work under the idea that they won’t be able to save money because they’re not earning enough.
However, the truth is that, even if you’re just setting aside a tiny bit at the end of each month, that can all start to add up a whole lot faster than you might think.
Then, you’re able to give yourself a cushion to fall back on if you end up having to make any sudden financial commitment.
Most people tend to assume that it’s the big expenses that make the most difference to their financial health but the truth is that, a lot of the time, it’s just as much a matter of the little things as well.
Little purchases here and there might not seem like much but they can add up incredibly quickly and before you know it you’re spending more than you can actually afford.
The key is to make note of every little thing that you’re spending money on so you can not only monitor your expenses but also so that you can see where you can start cutting back.
For example, I saved $19,000 when I stopped buying these 8 things.
3. Avoiding sudden expenses
One of the things that a lot of people fail to understand is just how much their lifestyle impacts their finances.
If you’re living irresponsibly then that’s going to impact your bank balance in a lot of different ways.
From dealing with having to pay fines, to settling insurance claims, if you’re out there living irresponsibly, that’s going to impact your finances.
Luckily, most of those things are relatively easy to avoid.
Of course, there are always going to be moments where you slip up when it comes to your finances and that’s okay. After all, nobody’s perfect and it’s something that we all have to deal with from time to time.
However, by working to be smart with your money whenever you possibly can, you’re going to be able to give yourself that leeway to make those little mistakes without it causing huge problems in your life.
4. Have adequate protection
You can’t always predict the outcome of life. One minute you could be totally satisfied with your income and expenses and overall financial state and the next, you might be totally wrecked if care is not taken.
To avoid this, it is best to have adequate protection by first identifying how much protection you need for either yourself or for your family.
Once that is established, you can then work towards buying it through the right means. Insurance and investments help greatly in protecting you from future disaster.
This could cover basic but essential areas like health, disability, and home. You need to know how much protection you need, and then work towards building an adequate one.
5. Be financially literate
Everyone who makes and spends money should be financially literate at all cost. Know the basics, at least, and gather enough information as regards finance that you will need.
Before making a financial decision, it is important to educate yourself, so you don’t ruin your entire financial life.
Check out blogs, newspapers, websites and even online communities to get adequate info, and you can be sure that you won’t make any silly mistake.
Read extensively on what you intend to decide on, so you don’t make your decisions based on ignorance.
Also, remember to get the help of a professional where and when necessary.
6. Cut recurring expenses you don’t need or use
Always run a check on your bank and credit card statements to see what you spend your money on and how you can cut it.
You might sometimes realize that some of these expenses aren’t worth it and are just sucking up your money for nothing.
Or you could realize that you don’t need as much as you spend on.
Once you discover this, you have to find a way to cut it down to fit into your budget and not go into excesses.[adsense]
Online services or smartphone apps like Mint can help you check how you receive and spend your money so that you can see your expenses.
Take out things you have stopped doing or that you do not value anymore.
Common examples include:
- newspaper and magazine subscriptions that you don’t read anymore and can be replaced by online magazines and blogs
- the gym membership that you stopped using because you now exercise at home
It could also be as little as the coffee and lunch that is brought down to you every day when you can as well try to arrange something from home and not have to order every day.
If you look well into your expenses, you will figure out what the excesses are if you are truthful with yourself.
7. Make sure saving goals are SMART
Once you start saving with a goal in mind, ensure the goal is SMART.
SMART is an acronym that means that the goal is:
If your saving goal doesn’t meet these criteria, you may have difficulty in achieving it.
Estimate what the goal will cost and then calculate how much you will have to put aside every week or month to achieve it in due time.
Also, be realistic with yourself and ensure you can meet up with the fixed dedicated amount to help you reach your goal.
8. Prioritize debt repayments
Start paying your debt relief programs as soon as possible, and not wait for an unrealistic increment of a paycheck in the future.
Cut down on the number of debts you get into, and try not to get involved in those that are unreasonable or that can be entirely avoided.
A mortgage (housing loan) is an example of good debt, but you can’t say the same for party loans and other social outings.
You will need to clear off your debts to be able to save for your life goals conveniently.
Here’s how to pay off debt faster with Dave Ramsey’s method.
9. Eliminate spending temptations
Cut down on every spending temptation that might put pressure on your finances. Ignore mailboxes with credit card offers and sales notifications, so you don’t keep on spending.
Also, take your time to unsubscribe from store emails that won’t stop sending you updates on their newest products.
These financial planning tips, if maximized well, will help you strengthen your finance in the long run.