A key focus of my blog is Financial Literacy/Money. According to talk show host and writer Dave Ramsey, wise money management is 20% head knowledge and 80% behavior. While the smaller percentage of the two, the 20% is critical though. The following contributed post is entitled, Finding Better Ways To Use Your Money.
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Money management isn’t a talent that comes naturally to everyone. If you feel that you don’t live life in a fiscally responsible manner, however, then there are things you can do about that. It’s never too late to make an improvement to your personal finances. It all comes down to spending and saving your money in a well-balanced way, at the end of the day. You don’t want to save everything – certain expenses are unavoidable, anyway. But you also don’t want to waste your earnings. It’s time to find better ways to use your money, and here are some helpful suggestions.
Reduce unnecessary expenditures.
The best way to use your money is to cut back on wasteful expenses so you have more available income for the important costs in life. For starters, if you know you’re prone to splurging as the result of certain spending triggers such as feeling bored or stressed out, then it’s important to master the art of self-restraint. You might even want to take out a small sum of money for “non-essential expenditures” on a monthly basis. That way, if you do want to treat yourself to luxuries, you’ll be limited in terms of what you can buy. This will train you to be disciplined, but it’ll also prevent you from being too destructive if a shopping urge overcomes you. You just need to be a conscious consumer.
It might even be a smart idea to keep a small amount of cash on you and leave your credit cards at home when you go shopping. Of course, luxury expenditures are a small part of the problem, but you can reduce unnecessary basic expenditures, too. You need to keep your home heated, for example, but you could reduce your energy bills by insulating your windows with thicker glazing and getting draft excluders for doors. If you want to start finding better ways to use your money, then you need to start by noticing examples of wasteful spending in your life and making the necessary changes.
Make good investments.
As mentioned in the introduction, you don’t want to simply save everything you own. Whilst you should protect your earnings, leaving them in your bank account to collect dust won’t help you in the long-term. You need to start investing some of your money so you can increase your wealth. Your salary might cover your present-day costs, but what about the future? Building up a portfolio of strong investments will help you to make money for your retirement or your children when they go to college or move out and get their own homes. You could consider investing in the property market. You might even want to get real estate training so you can figure out how the industry works. You can make a lot of money from selling or leasing properties. It’s a worthwhile investment opportunity.
Start paying yourself first.
Thinking about the future is the best way to ensure you use your money wisely. That’s why you need to start paying yourself first. Earlier, we talked about practicing discipline and reducing your monthly spending. Well, one of the easiest ways to achieve this is to remove temptation. In other words, put a portion of your paycheck into your savings on a regular basis. In fact, you should do it on your payday. That way, you don’t have to worry about overcoming the urge to dip into your bank account and take out money for non-essential purchases; you’ll already have moved that money. Start paying yourself first, and you’ll be much wealthier in the long run.