My Lucky 13 Money Management Tips
We all have our own unique relationship with money. This typically evolves from money scripts or our views of money that are deeply rooted in our childhood and impact the way we view money. We certainly have our own unique way of both spending and saving money.
However, if you’re ready to start putting some money aside, or looking for tips on money management, or even the best way to pay your bills, the following tips may provide a little bit of help:
- Keep track of your income and expenses. This means looking at bank and credit card statements, not just assuming they’re accurate. This can be easily done online. I recommend that you routinely check your statements and not assume they are accurate.
- Opt-out of paper billing and have your statements sent over via email. You’ll reduce clutter, bills will no longer be misplaced or tossed out in error, and you’ll always know where you can find a copy.
- Pay your bills online if possible. This reduces the need to sit down, write a check, put postage on the envelope, and mail it. Does anyone do that anymore? You can pay the same bill in around a minute online with no added expense. Also recommended is to put bill payment on autopay, to avoid even having to think about it.
- Start saving for retirement. While it may seem a long way off, it comes much faster than you may think. Be prepared. Social security will typically only cover a fraction of your living expenses, so you will need to start saving for retirement the sooner the better.
- Always pay more than the minimum on any credit card bill, even if it’s just a few dollars more. Keep credit card debt as low as possible. If you can pay off your credit cards even better as they carry much higher interest rates.
- Ideally, only use your credit card when you know you can pay it off in full at the end of the month. Then you can ignore Tip #5.
- Always have an emergency fund on hand. While we never want to have to use it, you’ll be prepared should you have to use it. I would recommend that you have 6 months of living expenses available in cash in case of an emergency.
- Avoid the “Keeping Up with the Jones” syndrome. It’s so easy to get into the habit of keeping up with our friends. That latest purchase may bring some fleeting happiness, but then we’re left alone with a house full of material possessions that mean nothing. Make yourself happy and stop worrying about your friends. If they like you because of your possessions, you don’t need another big-ticket item, you need new friends!
- NEVER, NEVER, NEVER take out a payday loan. NEVER! Enough said!
- Regularly check your credit report for errors and report them promptly. Your credit score is one of the most important things in your life. Take it seriously and make sure your report is accurate.
- Create a budget and use it. A budget app can be particularly useful for those that have the temptation to splurge and their budget is on a spreadsheet on a computer at home. Having a budgeting app on your phone makes it much more difficult to cheat. Budget apps make budgeting fun, don't they?
- Eat at home more often. Plan meals in advance or cook all your dinners on Sunday so you only have to rewarm them. Having a meal that can be easily prepared really cuts down on the desire to eat out. Your waistline and wallet will thank you.
- When you do splurge, don’t just buy an expensive item, buy an experience. You’ll remember it a lot longer. For instance, plan for that big vacation and save the money ahead of time. This way the vacation is enjoyable not just when you are on it but when you get the final bill!
The key takeaway is to always be conscious of not just the short term impacts of spending decisions, but how it impacts your long term financial health. I believe that financial health and emotional wellbeing are related. Careful decisions now can make your life a whole lot simpler down the road not having to worry so much about money.
*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets.