Proper management of money is crucial for success in life. It allows you to purchase the things you need, put money aside for emergencies and future expenditures and sleep well at night. Following are some tips to help you do just that.
Setting Aside Money For Future Expenses
It is very important to build an emergency fund. You should have enough money set aside in a money market fund or a similar investment vehicle so that if the need arises, you can live on that money for three to six months. This can help get you through an illness or injury that prevents you from working for a time, and it can provide you with money you need for necessities while you are between jobs, in case you lose your job for any reason. If you do not have enough money put aside at the moment, save a little bit each month until you build up enough funds to provide you with a comfortable cushion.
Make sure that you always pay your bills on time. If you cannot pay them in full, make sure that you at least make the minimum monthly payments. If you do not do this, your credit record will suffer, and that will make it difficult and/or more expensive for you to make other major purchases or take out loans in the future.
It is a good rule of thumb to avoid lending money to anyone. If you want to give someone some money for any reason, it is best to consider it a gift. Loaning money often winds up causing problems between the person lending the money and the person receiving it, so it is best to avoid doing this. Recouping money lent may wind up being difficult and cause hard feelings, so try to avoid this if at all possible.
Only purchase things that you can afford. This may mean that you buy a small, used economy car rather than a large, brand new SUV that guzzles gasoline. Or it may mean that you visit a thrift shop to buy clothes for your kids instead of buying them expensive new outfits that they will outgrow in a few months. Rather than buying a house that will strain your budget as you pay for the mortgage, taxes and upkeep, perhaps you should rent for a bit longer or live with family members until you can afford to get your own place.
Whether you are buying groceries, clothing or major appliances, try to save money by taking advantage of sales, coupons and any available discounts. There is no need to pay list price for anything, as most items eventually go on sale. Keep an eye on your local newspaper for sales and coupons, and plan your shopping accordingly.
Eating out is something that many people enjoy, but it is usually much more expensive to eat out than to prepare and eat your meals at home. Try to only eat out on special occasions. Eat breakfast before you leave for work in the morning, and bring a bagged lunch to work with you rather than eating out every day. You will be amazed at how much money you can save by doing this.
When it comes to money, it is always best to use common sense and live within your means. If you do, you are likely to always have enough money to buy the things you need and enjoy some extras as well!
