Managing your money properly has nothing to do with how much one actually makes. In fact, the key lies in proper planning and management of money. Here are some basics that can help you organize your finances regardless of your income.
- Set up your budget
First thing you need to do for controlling your finances properly is budgeting. You may have to put in some effort but it is one great option for avoiding financial debts. Besides avoiding debts, you can be able to avoid unexpected costs, enjoy good enough credit rating and spot areas with potential of saving money.
- Make your emergency fund
Emergency funds are really necessary in order to avoid financial debts. If you’re a single and don’t have car and you live on rent, you might find $20 quite adequate. Otherwise, anything between $35-$50 would do the job. In case the emergency fund grows too much in its size then you can stop putting money in it for the time being. In this way, you will be able to deal with any emergency costs and avoid getting into debt.
- Use envelope system
In order to keep your daily expenses in order, make sure that you go the old school way by using envelope system. Make envelopes for each day of the month and put adequate amount in it for daily use. This way you will be able to avoid overspending. This certainly is one smarter way of managing your budget.
- Use spending tracking tools
In olden times, people used to keep track of what they spent using expense sheets made on paper. Now, in modern times, you can take assistance from spreadsheets for recording all your day-to-day expenses. It also allows you to manage your budget according to things that are needed the most. If you are a kind of person who keeps receipts all the time then it won’t take much time in entering these receipts into your spreadsheets and you can easily make all the entries over a weekend. However, if you are doing it for the first time, it may also be advisable for you to skip these manual tools and move straight to the mobile apps that are designed for the same purpose. You will just have to find one which works well on your phone.