EP - 03 3 Tips on How to Better Manage Your Money

For most of us managing our money consists of living week to week, waiting for our next payday and praying that when we get to the counter of the supermarket, we have enough money on our card to pay for food that week.

Even though money can be uncomfortable and awkward to talk about, whether we like it or not at some point or in time money is going to control where we live, what we eat and where we choose to holiday. For that reason it is vital that we learn how to manage our money and take control of our finances as soon as possible.

These are My top 3 tips on how to better manage your money.

1: Get crystal clear on WHY you want to be better with your money

Do you have a goal in mind that you would like to save money for, maybe a house deposit, new car or an overseas holiday? Maybe, you have some credit card debt that you can’t get rid of, and you just want it out of your life. Perhaps you have recently turned 30 and can no longer use the excuse; it’s all good I am only in my 20’s!! Perhaps you are just sick of living week to week and feeling guilty every time you spend money on yourself. Whatever the reason is for you making a change write it down and keep it as a reminder of where you are doing this.

2: Know how much you are spending

Regardless of if you earn 1 million dollars or 30 thousand dollars a year if you spend more than you make you will be broke, period. The first step to finding out if you are spending more than you earn is it list down all of your current expenses, and things you spend money on (try to be as detailed as possible include big and small costs. Now once you have an idea of what you think you spend each week or fortnight, it’s time to track your spending for a week or two and see how you compare to what you think you spend. This is not trying to tell you to give up your daily coffee or not to buy a new pair of shoes each week instead it’s a way of increasing your awareness and understanding as to how much it costs to be you. Your results may shock you, as you might realise that you didn’t spend anywhere near what you thought you were which means you have some money to put towards your next holiday or your house deposit.

3: Take a closer look how you use your bank accounts

How you use your bank accounts or how you structure your bank accounts is the quickest way to improve the way you manage your money. If you are the type of person that only has one bank account which all of your income goes into and all of your expenses come out of then, this could be causing you some issues. You might want to consider setting up multiple accounts or sub-accounts to help you allocate or store your money until you need it later. This is useful for your big bills that only come around every 3 or 6 months like your rates, car rego or electricity bill. Always be careful of extra fees when opening up additional accounts and always read the fine print before choosing a financial product.

Money isn’t the most fun topic for most people but when you learn to control and manage your money better life can be pretty good.