It starts with the first piggy bank one received as a child — that was the first lesson in finance management.
Children are taught to save their pocket money to pay for a new wardrobe for Barbie or get a Tamagotchi. There is no doubt about it — finance management is one of the most important skills needed in life.
But the harsh truth is, saving money is not easy. Life comes with numerous challenges, financial and otherwise.
Here are some pointers on how to more efficiently manage one’s finances.
1. Create a budget
It is very important to have a budget. People tend to forget that their entire income is not available for spending — rent must be paid, obligations must be met.
Calculate your monthly expenses, then see how much is left to spend. Track normal monthly expenses and assess what was actually spent.
It is important to write down the budget. Try to create a projected budget that is as close to the actual budget as it can be.
Tracking expenses is crucial, so try to be certain that all expenses are being watched.
This is the only successful method of getting rid of unwanted expenses when one is closing in on the target budget.
2. Spend money with success
Make wise purchasing decisions. What is going to be used once or twice should be borrowed or rented, so the focus is on a good investment.
These include a down payment or a mortgage to buy a house because everyone needs a roof over their heads.
In addition, it helps to keep an eye on one’s credit score, as this is very important to obtain credit as time passes.
Make the most out of the moolah by making smart investments. There is a tonne of research involved but it will help determine which investment opportunities are the best.
Each field of work comes with various types of investments that could be good or bad, so make sure to make the right decision.
On top of all that, one must think about a retirement plan and insurance, such as life and health, house and against disaster because these are very important.
4. Saving money
Saving money must be a priority. Between warehouse sales and wanderlust, it can be hard to save money sometimes.
Keep in mind that no one knows what the future holds, so saving money makes sure one is prepared at all times.
Try to get an emergency fund going because it may come in handy one day.
This article first appeared in The New Savvy The New Savvy is Asia’s leading financial, investments and career platform for women. Our bold vision is to empower 100 million women to achieve financial happiness. We deliver high-quality content through conferences, e-learning platforms, personal finance apps and e-commerce stores.