At some point in life, everyone wishes to reach financial freedom. Well, at least I do. As individuals, we do whatever it takes to reach a point where we don’t need to worry much about the bills we got to pay, or to purchase things that we want. Reaching financial freedom can also mean that we don’t need to live paycheck by paycheck.
We often times equip ourselves the skills and knowledge that are learnt in school but we neglect the part where we need to equip ourselves with some financing knowledge. Managing finances is not as difficult as it seems.
Here are 5 simple ways to manage your finances in the most effective way.
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1. Changing your spending habit
It can be the Starbucks coffee that you crave before you start your day. If you spend an average of $4 for a cuppa every single day in a month, it would sum up to be $120. You can spend money in buying good quality coffee from the groceries and have it prepared yourself at home or in the office. Cut down on expensive takeaways as well; if possible, prep foods from home and bring it to work. That way, you’ll be able to save a lot than eating out. It is healthier that way too.
2. Keep track of bank service charges
When you really look into it, though at a small sum, if you times it with the many times you’re incurred; it can amount to a lot. Try to do some research before opening up bank accounts. Different banks offer different types of facilities. Some of them requires you to maintain a certain amount of cash in it or they will charge you a certain percentage of fees. Besides bank accounts, researching on credit cards which have low or no annual fees can be helpful too. Have credit cards that have good deals such as cash back on purchase; or even petrol savings.
3. Install a finance / budgeting app on your smartphone
Technology is so advanced now that many financiers provide tips on financing in the form of apps. Users can access to financing tips from famous and renowned financiers at the tip of their fingers. Budgeting app helps to track on your monthly spending such as on foods, clothes, utility bills and more. That way you will be able to see a summary on where your spending goes. Most budget applications have a chart or a table to help summarize the percentage of where your spending goes and make necessary adjustments when needed.
4. Save a certain note denomination
For me, the easiest would be saving every $1 and $2 that I have in my wallet; meaning for every $1 and $2 you have, you must make it a point to put aside the notes in a saving jar. Keep the saving jar away and never attempt to use the money that you have put away in the jar. Accumulate it overtime and you will be able to see the amount growing before you know it.
5. Cut out on impulsive buying
There are several questions that you need to ask yourself before purchasing that new dress or that pair of shoes. Will you be wearing that new dress for an upcoming event or will it just end up tucked away inside the closet? Have some thought before purchasing. If you have the budget for it, by all means go ahead. If not, try to keep it for another day.
Always find the best way to keep track of your finances. Start now. Don’t wait for tomorrow. By tracking your finances, you will be able to accumulate a sum feasible enough to help during rainy days or aiding when the next best investment opportunity comes in your way. All the best!