Money management skills are an essential life skill. Going through school we learn about our history, math, English and even cooking and carpentry skills. However, what we don't learn is how to properly manage our money.
Unfortunately for most of us, we develop bad money management and spending habits as we go along. This can lead us to a life long struggle with finances and debt. Better money management can help you get in front of your finances so you never have to struggle with money again. Here are a few things you can try to improve your money management skills.
Revive Financial asks its clients a number of questions to get to know their situation better. These questions include what is your income? Where your money is going? How much do you owe on your debts? Who do you owe money to? The number of clients who can't answer these questions is surprising.
You will never be able to get a hold on your money management if you don't know how much you have and what you need to spend at all times.
The best way to develop better money management skills is to first start with monitoring your spending habits for a month by writing down every single transaction. This should really get you thinking about your finances and whether your spending is in control.
Now you are starting to look at how you spend your money, you need to determine whether you are spending more than what you are earning. If your expenses exceed your income, you are going to have to use money management skills to make some serious cut backs and prioritise your expenses. Make sure you always have enough cash for your bills and financial commitments.
By creating a budget, you can see exactly where your money is going, and if you need to slow down your spending, it will help you identify areas you could cut back on. Cutting out certain entertainment costs, such as magazines, cigarettes and coffees can help reduce your spend. Budgeting is a crucial part of better money management.
Are you keeping up with your credit card and loan repayments? By paying the minimum repayment amount you are paying maximum interest and fees. You should be paying as much off your loan and credit cards as possible to reduce the lifespan of your debt and therefore reduce the interest you have to pay.
If you are struggling to keep up with your debt repayments or have fallen behind talk to Revive Financial about money management immediately. The longer you are in arrears the worse your debt becomes and the less options you have available. Act quickly and pull your debt into line while it is still manageable.
Keeping track of your money on a piece of paper with a pen is better than nothing. But in this day and age you could download a computer program which will help you track your money as well as forecast your future financial position and create a 'roadmap' for you to follow to achieve your financial goals.
More and more Australians are turning to Revive Financial for a positive solution to their debt problem. From budgeting help to Debt Consolidation, loan refinancing, Part IX (9) Debt Agreements and even bankruptcy, Revive Financial can help you turn you finances around. Contact us today for a free consultation.
For more information on budgeting and how it can help get your finances back on track, check out our budgeting page.