Can remember learning about how to manage your finances? Anything come to mind? Some of us may have had a class on it back at school, but for the most part, it’s a good question to ask “where did you learn how to manage your cash?”. Being smart with money and staying out of financial trouble is a goal many of us want to achieve, but without the proper tools to do so, we might find ourselves staring a mountain of debt straight in the eye!
It’s more than likely that your cash savviness, or lack thereof, came from watching your parents manage their money. For some people, this is a feather in their cap as their family finances were in order. For others this may have continued the financial disaster leaving your with financial trouble. Being smart with money, is not hopeless, if you haven’t been good about it until now. In fact, this is a skill that just about anyone can learn, and with a bit of discipline your finances can be in great shape in no time!
So how does one learn how to be smart with money and stay out of financial trouble? The first step is to learn how to budget. Budget entails knowing how much money you’re actually bringing in, and how much money you are spending. If you set yourself a monthly budget and you use focus and discipline, you can stay out of debt, by only spending what you have, and nothing more. Make a list of the monthly essentials, including your bills and putting food on the table. Once you have that, write another list of your monthly “wants”. If you have covered all your needs and stocked a little cash away into your savings, then you can take out your “want” list and get an item or two. When it comes to budgeting, knowing exactly what you spend is key to success.
If you want to continue being smart with your money and kissing financial trouble goodbye, then using cash for all your purchases is essential! Parting with your crisp bills, becomes a lot harder when you notice your stack in your wallet getting smaller and smaller. Far too often we take out our little plastic number and swipe away at our purchases. It’s great for convenience, but detrimental to our finances! Why? Because with credit cards, your money never runs out, and what’s more is you don’t notice how much you’re spending, until you’re hit with a fat bill at the end of the month! If you want to keep an eye on your spending, stick to cash!
Financial trouble can come in many shapes and sizes and if you’re being smart with your money, then paying off your debt should be a big focus! Start with paying off your smaller debts first, and once they are paid in full, move onto the larger ones. It’s a great sense of accomplishment to see your debt knocked down to size.