Some Common Sense Money Management Tips
Posted: June 15, 2012
Managing ones money properly is crucial for success in life. Money and credit is our primary method of paying for the things we need or want in life. There are still some forms of bartering going on but primarily money is used to pay for things purchased or needed.
If you learn to put money aside for emergencies and future expenditures then you will find that it will be easier to get a good night's sleep. Below are some tips that will help you to manage your money in a responsible manner.
It is very important to always maintain an emergency fund. Emergencies come in different manners. Most people think of an emergency as some type of accident but in fact an emergency that would require additional funds might be loss of job, loss of home due to fire or storms or something like travel expenses due to a family member's illness or death.
You should place funds in a savings instrument, like a money market or savings account, monthly so these funds will be readily available when you need them. Strive to always keep at least three months and preferably six months of monthly living expenses available in your emergency fund. If it currently takes $3,000 for you to currently pay your bills, buy food, pay utilities, etc. then you will need at least $9,000 in your emergency fund. Save each month until you have built up a comfortable cushion in your emergency fund.
Pay Your Bills On Time
Be sure that you pay your bills on time. If you cannot pay the bill in full then at least make the minimum payment due. Paying your bills on time is key to protecting your credit scores and credit rating. If you lose your good credit rating then it will be difficult, if not impossible, to make other major purchases on credit in the future.
If you find yourself out of work for a long period then you may have to rely on your good credit rating as well as your emergency fund just to get by until you can find work again.
A good rule of thumb is to avoid lending money to anyone even if they are friends or family. It is best to consider any money that you give to anyone as a gift. When you loan money to someone and they don't repay as promised it is a good way to lose that person as a friend or to make a family member someone that you don't see or speak to for years. So, it is best to just have a policy of not loaning money to anyone. This includes co-signing for credit for someone else. Just don't do it.
Purchase What You Can Afford
Don't purchase things that you can't afford. What this might mean is that you buy a smaller, used economy car if that is all you can afford at the time. You have to consider the cost of not only the car you are buying but how much your insurance and tags will be, plus how much more or less you will spend in gasoline over a few years that you might own the car. If you can truly afford a big, new SUV and that is what you really want then by all means buy it.
Save With Sales, Coupons and Discounts
No matter what you are buying, in this day and time there is probably a coupon available to help you save on that item. If it is a large item like a car then instead of a coupon you will want to watch and wait for a sale. There is no need to pay list price because most items like appliances, cars and so on will have a sale shortly. Just wait a few days or weeks. Sales for these type items are usually always available around a holiday.
Not only can you find coupons to help you save when eating out but many restaurants will have a daily special where you can save on what you eat.
Even though you may enjoy eating out it is usually much more expensive to eat out than to eat your meals at home. Therefore, try to eat out only on special occasions. You can also save by bringing a bagged lunch to work. Most offices today have microwave ovens and refrigerators available to employees in a break room. This mean you can still have a nice hot tasty meal without spending a lot of money.
Eat breakfast before you leave home so you won't be tempted to stop for that fast food treat on your way to work. Take a cup of coffee from home rather than spending a lot of money on an expensive cup of coffee after you get to work or on your way.
Just Being Aware
Half the battle to having money is simply being aware of where you are spending your money you do have and keeping up with whether or not you can really afford what you are buying.