How to Manage Money
Don’t worry, you don’t have to be a math genius, you just need to know basic addition and subtraction. Here are 9 tips to help you know how to manage money:
The best-known "secret" to securing your financial future is to begin investing earlier rather than later. With compound interest, your money grows exponentially faster over time. Waiting a few years might cost you more than you'd expect.
As easy as it is to buy something on credit instantly, it's usually better to use these cards as you would debit cards. By saving up rather than using credit, you avoid paying interest on purchases. You want to avoid paying high interest on credit cards by paying your bills on time. Delaying gratification will go a long way in helping you be better with your money and allow you to save more.
Having part of your income automatically locked in a savings account that pays interest every month can come in handy for not just an emergency but compounds your overall savings further. This will become useful to dip into when unforeseen circumstances strike. Stay out of financial trouble and sleep better.
With compound interests, the sooner you start saving up, the lesser principal you'd have to invest to get the same yield as you would've if you started later. Even if you only have a limited amount you’re able to invest, small contributions can help you use your earned money to generate more income. Look into retirement accounts and 401(k)s for the US. Play the long-term game.
If you're going to be earning money, you're also going to be paying taxes. Preparing for taxes goes a long way in keeping a clear mind when they roll around. For example, always set aside investment profits to pay for capital gains. You got this!
Tracking your finances goes a long way in knowing what you can and can't afford. Remember that just because the money is there doesn’t mean you can afford a purchase. Having a better view of these numbers will also help you understand how much you can set aside for investing, or add to your emergency fund. Set aside a few hours each month to create a realistic budget. Build better habits for later!
Knowing what you want to accomplish with your money will take you further than collecting bills for the sake of it. Motivate yourself by knowing clearly what goal you want to accomplish by what date (like paying off debt). Time is your friend!
The best way to maximize your savings and have more to invest is by optimizing how much you're earning. If you accept the first offer, you're missing out on pay ranges that you could have negotiated into. Negotiate your salary, and get paid your worth!
Thousands of resources exist today. From saving to protecting, and investing your wealth, you've got options. Here are some books we recommend on how to manage money.
You may not be used to saving up and planning ahead right away, but the more you incorporate these habits into your daily life, the easier it is to know how to manage money. Start small, and learn a lot over time!
TL;DR: You don't need a fancy degree to know how to manage money. Learning as much as you can, saving early, and being wise with your money will take you a long way.