Money Management Tips, Tricks, and Examples

Introduction

You must have gone through many financial magazines and even searched some methods on money management and other simple money management tips. Money management sounds tricky subject to read and understand. Still, in reality, it is elementary if you get your concepts right. Managing money is no rocket science, to be honest. Once you know some necessary do’s and don’ts, then it is just a piece of cake for anyone. There are various money management examples you can find all over the internet.

Being good with all financial decisions and using your money smartly is all you need to meet your daily needs and even save money in the future. An individual should understand the fact that money is just not for spending. There are certain habits that can change around all your perspective of spending money and saving out of it.

The basic knowledge about money and learning from some money management examples will always help you in future in meeting all necessary needs. You can also use many online money management apps to cut down expenses and stay financially strong. Still, all this comes later as we understand money management methods. 

Before coming to all the money management tips, one should understand about

money management
September 7, 2021
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Table of Contents

Why is money management important?

When you practice money management efficiently, you get a clear picture of how much you need to save for your taxes and other expenditure. You can increase your cash flow by monitoring how much you are spending and saving altogether. 

Future

When you focus on money management, then you also think of your future. Thinking of the future leads to financial independence and secure life. Not only your life gets secure, but you also make sure your family lives up to an excellent standard of life. When you use simple money management tips, you can also invest in various options, which allows you to enjoy its perks later.

Standard of living

When you start money management at the right time of your life, then saved money can lead to a great quality of living. When you have the extra cash in your hand apart from expanses, it will be a saviour in a problematic situation. Following some of the money management examples stated below can help you with living a financially stable life.

Let’s look at some money management tips and tricks that will help you save money and meet future needs efficiently.

Some critical money management tips

Spend according to how much you earn

This is one of the essential points everyone should be aware of, but most people don’t understand its value. They tend to spend way much than they earn. In order to start this practice, you need first to budget your expenses and start tracking your monthly spendings.

When you start calculating your essential monthly expenses and how much you need to save, things automatically become easy. In this time of increasing expenditures, one gets into unnecessary items and purchases out of their limits. 

This is the best budget killer anyone can think of. Purchasing some of the stuff that can go out of your monthly budget. Make a habit of keeping your monthly expenses as low as possible. This will open several doors of savings. When you make even a tiny change in your budget and cut down several unnecessary things, it will significantly impact your overall budget.

Track all your monthly expenses

Tracking where your money is going sounds basic. You need to understand the act when you do, so you uncover some of the overused things that make you pay more. You don’t realise, but you indeed tends to make some silly purchases that cost your overall budget. 

Start writing down all your expenses, or you can use some online money management apps available. These apps come in handy, and you can add some necessary expenses and track your spending hassle-free.

Take a look at your credit cards and other cards and write all the spendings, and you can also start to label some of them as necessary, debts and extra spendings.

After getting a rough idea, you can categorise them into several things: transportation, entertainment, groceries, and travels and use such money management tips to identify expenses.

Invest in savings regularly.

Make a healthy financial habit and save each month some of the cash to invest in promising avenues. These savings will give you a good return in your later life and will act as a tremendous financial help when in need. First, pay yourself. This sounds like a ridiculous statement, but it works like a charm. When you pay yourself from the money you have, then indirectly, you are investing in yourself. Investing in your future self.

Future can be very hard with no money left in your savings account. When you start awarding yourself with some money at the beginning of the month, you create an efficient investing option for yourself.

Start saving and practice money management at your early age.

When you start anything at a younger age, you make things easier for yourself in the upcoming few years. We all know that in the future, the inflation rate and the economy will change rapidly. What can be the best method to dodge all this? Saving your funds and money management is the answer. 

The sooner you get into this, the better returns you can get. For instance, if you start your savings in your 20s, then getting the reward in the future will escalate quickly. You have made a habit from your early stage that will make you a better person financially. 

You don’t have to bear any expenses more than your food, transportation, and other miscellaneous things at your early age. But when you enter your 30s, you will be burden by many responsibilities. That’s a fact in India; you need to manage everything financially as well as mentally. Starting your savings early and staying away from unnecessary purchases can make you a solid individual. 

Choose wisely between your credit and debit card.

There will be a time when you need to choose between a debit card and a credit card. One should know the fundamental difference between both of them. Most people think a credit card is free money, but it is not. You can be under a lot of burdens if you do not treat it wisely and safely. 

A credit card is just money you are borrowing from a bank for a particular purchase, and at the end of your month, you need to pay all your bills. This doesn’t mean you can spend as much as you like. There is a limit set to your cards. Credit cards can be your friend and enemy simultaneously. A credit card generally gives you the upper hand in buying everything in a flash, but that can go against you. You tend to purchase some things that are of no use, or you put some costly something on your card. 

This practice can destroy your monthly budget inside out. You don’t want this to happen. It’s not like a credit card is a bad thing for you to use. If you use your credit card smartly, then it can act as an excellent asset for you in future. It can help you get future loans and build up a good credit score. All you need to do is pay all your bills on time and stay away from the interest rate put by your credit company. 

This interest can be a great debt for you and shake all your financial planning before you realise it.

On the other hand, a debit card is a safer option. In this card, you make purchases directly from your bank account to know how much you need to spend on anything. You cant exceed your purchase. As a result, you avoid paying any extra money. Some of the banks in India provide you with great cashback and rewards when you use their debit card for any purchase done. This money management tip can beneficial to understand the basics about card related purchases.

Set your financial goals

Now since you know how much you are earning and spending monthly. It’s time for you to set financial goals for yourself. We all know to achieve something, you need to picture yourself how to get to it. Having a clear picture of your future need and goals keeps you motivated with your earnings and savings. This all acts as a catalyst in reaching that platform faster. 

Always start from small goals, and as soon as you complete them, move on to the bigger ones. Challenge yourself by setting a more important goal after a certain period only after a steady income and practically possible. Don’t set such financial goals that are hard to crack. This will not only push you down but also shatter your strong will.

For example, start with something like a plan for the next 3months. Then move on to the plan for the next two years. Then to the higher step. With this, you can easily see your previous progress and can go ahead without any hindrance. Short term goals followed by long term goals. 

Emergency fund

Now you are working towards your goal and making sure you meet every need. But there are some instances where unfortunate things happen, whether it is losing a job, any unexpected medical bills, your car broke down and much more. No one knows what can come your way, this is life, and all this happens. 

When you have money stored for such a condition, then it will make you feel secured. You don’t have to go for a loan or ask for any favour from someone. All thanks to your savings and separate emergency fund you thought to save in your early 20s or 30s. 

How you arrange and save for, it is up to you. You can use a side hustle instead of working an extra 2 or 4 hours a day part-time. You can also try for doing freelancing. What can be the best platform to start a good side hustle? Chegg India provides the best platform all over India where you can earn a good amount of cash. 

Chegg India provides an opportunity to all where you can become a subject matter expert just by sitting at home. All you need to do is register on the website and take a screening test. After completing a screening test, you need to verify your basic details.

That’s all, after that earn as much as you want just by answering your preferred subject questions. And for every question, you answer you will be paid an amount depending on the level. The experts need to follow the basic parameters while answering. 

This other income source can help you collect a good emergency fund and make your money management more effortless. 

When you have multiple sources of income, then budgeting all your expenses: transportation becomes easy to handle. One can consider this as a good money management example.

Money management is a time-consuming process.

No one is a born expert; we all work our way to be good at something. When you start dealing with your own money and start spending them on the expenses, you’ll realise how tough this job can get. It is unnecessary on your first attempt; you will become an expert in managing the money and forming a budget. 

All such things come with time; sometimes, you will make some mistakes. From all those mistakes, you will learn something. Then you will not try to commit them again; that’s where your learning process begins. 

The more you teach all these money management examples in your life, the better you will get. When you start building your focus, there is no stopping for you. 

As a final observation

So there you have it, some of the best money management examples, or you can refer to online money management tips for you. After going through all the possible methods to save and increase your wealth, you should keep several things in mind. Start today, yes do not delay such habits. Make sure you make them your routine as soon as you can. 

Money management is a long process; you can’t rely on a basic budgeting plan for your whole life. At specific periods of your life, you will have to make changes to meet particular needs in life. 

The best way to hold a grip on your money is to know where and when you’re spending it. Apart from all the money management examples discussed, if you want more comprehensive financial advice or set up a financial budget, consider seeing a financial expert.

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