The Basics of Money Management

Are your one of those people who simply run out of money by the end of the month? Is your income substantial, but you still find yourself living paycheck to paycheck? Do you ever feel frustrated looking at your savings with only bare minimum amount all the time?

If you have answered yes to one or all of these questions, take comfort in the fact that you are not alone. Millions of Americans, even those with high incomes- experience financial distress too!

Hard times are not the sole reason as to why most families are still struggling with their finances. Majority of families who are living paycheck to paycheck identify lifestyle purchases as the main cause of financial difficulties. Financial discipline is one virtue that people, especially the younger generation, needs to learn and adhere to in order to achieve financial freedom. If you desire to break the financial struggle, the first step towards financial freedom should start with wise money spending or money management (check for more tips).

The Importance of Tracking Expenditures

Keeping track of your spending is the only way to determine how much money you are spending on essentials and non-essentials.  Entertainment, dining, sporting events, and hobbies are considered non-essentials. Make sure to minimize your spending on non-essentials. In some cases, people even forget to spend on their daily needs just so they can feed on their habits and hobbies. Instead of spending money on dining out at restaurants, why not allocate these funds on savings?

Make a list of your spending by recording the use of your credit cards and cash withdrawals. Create a category that aligns with the things you mostly spend on. Continue tracking your spending for a few months and make sure to change the way you spend in the process.

Minimize the use of credit cards and use cash or your debit card for all transactions. If you find this strategy effective, you will most likely find yourself with a lot of excess cash that you can then place under a savings account.

Once you have realized that majority of your income goes to non-essentials, it all depends on you if you are to keep up with your self-destructive spending habits. You have the option of changing for the better. There are many ways on how you can save money whilst not depriving yourself of desires once in a while. At the end of the day, it will all boil down to spending on the things that you really need and dismissing all the wants until you get stable financially.