How Can I Manage My Money?

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Managing your money successfully is the key to doing well financially. There are stories of people who worked a basic job, saved over the years and were able to retire with a million dollars in savings. There are also stories of people with high paying jobs that end up with nothing saved and unable to retire. The key to being successful is to manage your money. You do need to make enough to cover your basic expenses, but you may be surprised at how little that really is once you are focused on saving and managing the best ways that you can.

Managing Your Income

There are some basic rules that everyone needs to follow in order to successfully manage their money. It starts with managing your income. The key to financial success is to spend less than you earn. If you can do that, you can begin to build success through saving and investing your money. However, that is not always as easy as it sounds, and the key to doing it is budgeting successfully. A budget is more than a list of categories and amounts for your money. It is your monthly guide and your plan to help you reach your goals.

A budget works best when you write it out each month. You set the amounts, you prioritize your spending and saving based on your goals and circumstances, and then you track your spending. This lets you know when you need to stop spending in a certain category. You can adjust your categories as needed, but you should try to stick to them for the most part.

Once you get control of your budget, you will be on your way to managing your money successfully.

Managing Your Debt

The best way to manage your debt is to eliminate as much of it as possible. The first step is stop using your credit cards, and then work to pay them off. Some debt is harder to avoid, you may not have money saved up for a new car, but you need it to get to work.

When you borrow for a car, try to find the best deal possible, and find a car that you can afford to pay off quickly. You should also be wise when you by you home. You want a home that will appreciate in value, but you also want to purchase something that you can afford. Try to keep you debt payments below twenty-five percent of your income.

Managing Your Savings and Investments

It is important to find the best accounts for your savings. There are two different types of savings: your liquid savings and your investments. Your investments are beneficial because they will earn you money and increase your wealth. These investments may be harder to get to during an emergency, and you may not want to be forced to cash them in if the market down when you need them. If you do not know a lot about the stock market and investing, then it can be really helpful to have a financial advisor help you manage your investments. Mutual funds help you naturally diversify your portfolio, but you need to look for ones with reasonable fees and a good rate of return. Make sure that you are diversifying your portfolio. You should never have the majority of your investments in one single stock. You should also invest across investment types as well.

You do not want all of your investments to be in tech or any area in case that sector of the market drops.

Your savings needs to be the best possible types of accounts. You want to be able to access your savings fairly quickly if needed, but you also want to earn the best possible interest rate on them. Some people will build a CD ladder with their emergency fund that gives them access to money each month without a penalty. You may also choose a money market account or an online savings account to make sure that your savings is easy to access when you need. This money is not really an investment, but more of a protection for the emergencies you have or a place to put money when you are saving for a purchase. Your wealth building will need to be with your investments.