Beginners guide to money management

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How To Be Financially Intelligent With Money

If you constantly find yourself with too much month left at the end of the money then donít worry you are certainly not alone. It is a sad fact that most people do not manage their money intelligently and end up getting into a complete financial mess.

If this sounds like you then you need to work on your money management. When you do this you will find that your financial situation will improve greatly. A lot of people believe that only businesses have to worry about money management, but it really is for everybody. You will feel so much better when you have a handle on your money rather than living in chaos.

Change your Attitude towards Money Management

If you treat money management as a chore then you will always be in a financial mess. It is time to ditch the excuses about not being good at math, and not having the time to take control of your personal finances.

There is also fear to tackle. Some people just cannot face the fact that they do not have enough money available to meet all of their commitments. You have to tackle this fear head on, and when you do and take control of your money you will feel a whole lot better.

The Essentials of Money Management

You need to learn the basics of good money management to really be in control. We will cover each of these in more detail below, but for now be prepared to learn about creating a budget, saving and banking, investments, the management of debt and planning for your retirement.

You can take your time with all of these essentials. It doesnít matter how much time it takes you to master your finances as long as you make a commitment to do this. Here are the basics of each money management element:

Creating a Budget

The reason that you need a budget is to control the ins and outs with your money. You will need to know exactly what you have as income (your earnings and your spouseís earnings if that applies) and what you are spending your money on as outgoings.

There is no need to fear this process. It is really straightforward and easy to create a budget. You can use a simple spreadsheet to record your monthly income and then deduct your expenditure. By doing this you will highlight areas where you are spending too much and can decide on what you need to cut back on.

Savings and Banking

You probably already have a bank account but it may not be the best choice for your money. Not all banks are the same and some will charge more. Some will charge for different services and some will not. You need to know what banks charge for services such as online banking, overdrawing, speaking to tellers and so on.

When it comes to standard checking accounts most banks are reasonable with their charges if your paycheck goes directly into your account. You should receive a debit card with your account so that you can withdraw cash from ATMís and pay for goods in stores.

You should certainly have a savings account. When choosing this type of account find out the interest rates, and where the bank stands on minimum monthly transactions and minimum balances to be maintained.

Investments

Once you have control of your money with your budget you can consider making investments. One of the simplest forms of investment is a certificate of deposit (CDís). You can also invest in bonds, stocks, funds and commodities. Spend time studying and getting advice for these investments as there are risks involved.

Debt Management

Being in debt is a common problem. Credit cards are one of the worst things for mounting up debts that you then struggle to pay off. They usually have high interest rates on outstanding balances.

There are several ways to tackle debt and it is always a good idea to be proactive. You can renegotiate your payments with creditors, or you can get a debt consolidation loan to pay off your credit card bills and have a more manageable monthly payment with less interest.

Planning for your Retirement

It is never too soon to plan for your retirement. It is important that you put some money away for your future. If you your employer has a 401k plan then take advantage of it and make the largest contributions that you can. Some employers will match your contributions.  

   

 

 

 

 

 

 

 

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