Did you know that 49% of adults do not feel ready for retirement? The biggest reason for this is that they do not have savings.
As you are nearing retirement, realizing that you don’t have enough to support yourself can be quite a frustrating and scary thought. Luckily, if you are on the younger side right now, and even if you are entering retirement soon, there are things you can do to plan!
Learning money management tips can drastically improve your life at the moment as well as in the future. Keep reading to learn 10 money management tips to start putting into practice!
Table of Contents
Choose to Invest
Investing is one of the best things you can do with your money. Rather than having your money sit in an account that doesn’t let it grow, you can put it somewhere where it has the ability to grow.
Long-term growth is what really matters. Stocks and index funds grow in a much better way than putting your money in a savings account (or keeping it as cash). Of course, there isn’t a guarantee of how it will grow, but it has been shown to historically be one of the best ways to manage your money.
When you invest, you can also choose from various companies to invest in with stocks as well as funds. This creates a more diverse portfolio so that you don’t have to worry about putting all of your eggs in one basket.
Now, you can also invest in cryptocurrency and the crypto market. If you choose to invest in crypto, you’ll want to know some of the basics to get started. You can browse to learn more about this type of investment.
With that said, you may find that you love investing in all sorts of things, with crypto included as one of the components of your investments!
No matter where you are in life, one of your top priorities should be to save. The sooner that you start saving money, the quicker you will start building passive income through savings.
Before you can even think about investing, you need to be able to have that money saved to invest in.
Additionally, the more you are able to put into your retirement savings, such as an IRA or a 401(k), the more you will be adding to your future savings.
If you can only save 5% right now, start doing that. Realistically, you will want to get to a point where you are saving at least 10% of your income. Even more ideal would be 20% of your income.
This will set you up for success in the long run.
Cut Down Credit Card Debt
If you’re someone that is dealing with credit card debt, this may be the first thing that you want to take care of. The more that you have, the more that you will continue to accrue with interest. The quicker you get rid of it, the less money you will be paying over time.
While you should be saving money while paying off your credit card debt, prioritizing getting rid of your credit card debt can be a huge game changer with how much you end up being able to save in the long run. You also won’t have to worry about the interest piling up as you sleep if you get rid of the debt!
If you do have debt, you can set up a plan to start paying it off. How much money can you realistically set aside to pay off your credit card debt? Whatever number you do you come up with, stay consistent.
Track Your Money
If you have recently been feeling like you do not have enough money, but you have no idea where it’s going, you may need to start tracking where you spend your money. This is one way to keep track of your finances.
Not only will you be able to see where your money is going, but at this point, you will be able to determine if you can make changes to how you spend your money.
To start keeping track of it, you should set up a spreadsheet with different expense categories. Some examples of categories may be gas, groceries, restaurants, bills, and more. By separating it into different categories, you are better able to see where your money is going.
Once you do this, you may notice that you were spending way too much money at restaurants. Maybe you can set a goal to stop eating out as much per month. You may also see several other categories you could cut back on.
This will help you to save money.
Plan for Emergencies
Regardless of how you go about saving in spending your money on a daily basis, you need to have some easily accessible liquid funds for emergencies that come up.
For instance, you may have a solid six-month plan to pay off your student loans. You may not have all of that money at this moment in time, but you plan to. However, you may get in a car accident while trying to pay off your student loans and have a lot of medical bills. Having savings helps you plan for emergencies and will ensure that you stay on track with your money-saving goals and do not go further into debt.
Find What Works
You can follow all of the tips that you want, but you may have a better system in place for yourself that works. If you find something that works for you but it’s unconventional, this is more than okay.
As long as you’re making more than you are spending and saving along the way, you’re doing something that works. The focus on what works will pay off in the long run.
Work With an Advisor
Although you may understand and know what tips to follow, you may not fully understand how to go about investing, getting out of debt, and even how much to save on a monthly basis.
If that sounds like you, you may benefit from working with an advisor. They will help you to cycle your money. Do you also customize your own financial plan for your specific needs. By doing this, your strategic thinking will help you navigate the confusing landscape of finances.
Eliminate Unnecessary Costs
Are you someone who stops at Starbucks every day on your way to work? Do you love to grab a beer at the brewery next door every Thursday with your buddies? While this is great, it can quickly add up.
If you want to start managing your money better, you were going to need to eliminate unnecessary costs. Getting a coffee every day and a beer every Thursday may be unnecessary. That doesn’t mean that you cannot still enjoy the things you love.
Instead of getting a coffee every day at Starbucks, bring a coffee from home and reward yourself with a Starbucks every Friday instead. This will probably save you about $25 a week, which is hundreds of dollars a year – just in coffee!
The same goes for going to the brewery with your friends. You can still hang out, but you do not need to get a beer. Or, if you find that you get to beers, limit yourself to one.
One way to improve your money management is to set clear goals. When you have goals, you know exactly what you were working towards and what you need to do in order to reach them. This can help you manage your money on a daily basis.
Utilize Workplace Plans
When you have a job, many offer workplace plans to help you financially. Some may offer to match your 401(k) while others may offer group retirement plans.
In both cases, it’s beneficial to hop onto these plans and let your employer help you out! Matching programs are basically getting free money.
When you choose to invest in crypto or an index fund, start creating a monthly budget sheet, and/or set goals, doing just one of these tips will help you with your money management!
Whatever you do, choose one and start now. Even better, try to implement one per month to broaden your money management skills. It will really start to pay off.
Did you enjoy reading about these money management tips? You can check out some similar blog posts to this one on our site! Happy browsing!