What Is the Importance of Money Management?

Creating your budget is crucial, but managing your budget is arguably even more important. You cannot just write down a budget at the beginning of the year and never look at it again. You must continuously manage your money with an updated budget to monitor your finances for every month.

Moreover, this budget will guide your plans to achieve your long-term goals. On that note, let us discuss the definition of Money Management.

What Is Money Management?

The process of keeping track of your finances is called Money Management. This includes your spending, savings, budgeting, and investing behaviors. It is the key to helping you save money to accomplish your personal goals. You need to find a management technique that works for you as everyone manages their money differently.

What Is the Importance of Money Management?

There are multiple reasons why managing your money is important to your life. Firstly, it helps you to stay on top of your finances. You will be able to tell whether you are overspending before you get hit with overdraft fees. Money management also helps you to avoid incurring too many fees on your credit card bill.

Secondly, money management helps you plan for your future. My partner and I recently got married. To help save for our wedding, we made some down payments to the suppliers through careful monitoring of our cash flow. Managing your money increases your knowledge of savings and aids in accomplishing your financial goals.

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Thirdly, money management keeps track of your expenses. How much do you spend on rent and groceries? Perhaps, you can cut back on some unnecessary expenses such as your monthly subscriptions.

Lastly, money management increases the sense of security. There is nothing worse than feeling overwhelmed when it comes to your finances. Reduce the unwanted feelings and be able to pay off the next bill by closely monitoring and managing your cash.

Source: 1

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Just Got Married! Now What?

Marriage is about teamwork and compromise. Whether you have been married for two weeks or two decades, it is essential to be able to work together with your partner. The reality is that working together can be challenging, especially when it comes to your finances. In fact, the majority of divorced adults cited money as the reason for their separation.

You can tackle money as a team with honesty, communication, and dedication to a shared plan!

#1: CREATE A HOUSEHOLD BUDGET

A budget should tell you how much money you anticipate having and where it will go. Your income and expenses will change once you are married. It is important that you create a new combined household budget and revisit your Indvidual budgets to adjust to the marital shift.

#2: SET SHARED PRIORITIES

What do you value the most as individuals? What do you value the most as partners? Personal management begins with understanding your priorities and what you want. As you come together, you will need to merge those priorities and ideas to filter what you both believe in. These priorities will help influence your most crucial money decisions.

#3: SIT DOWN TO DISCUSS

It is unpleasant to talk about money during inappropriate times or when your spouse is not ready to discuss serious matters. Do not discuss money at random times! Pick a specific date to talk deeply about money. This mutual time for a meeting will enable you to stay on the same page. Feel free to raise your concerns to produce a shared solution.

#4: EMBRACE YOUR DIFFERENCES

Everyone has a different relationship with money. It is not a requirement that you understand how your spouse feels the way they do, but it is important to recognize and respect those feelings. Accept that differences are inevitable.

#5: ESTABLISH A JOINT EMERGENCY FUND

Once you and your partner are living together, you can both work on setting aside funds for any potential emergencies such as unemployment and sudden home repair. A high-yield savings account can be the perfect place to build this joint emergency fund. Set aside cash savings that is equal to about six months’ worth of your joint fixed expenses.

#6: HAVE A SHARED CREDIT CARD

Maximize the rewards you can earn on all your joint purchases by opening a joint credit card or having your spouse become an authorized user on your credit card. If you sign up for a rewards credit card, you can use your newly established joint checking account to pay off that credit card every month. This will increase your bonuses and rewards along the way.

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#7: TRACK YOUR SPENDING

Another way to avoid fights about money is to track your spending. There are no surprises when you track your spending together. There is many personal finance management software available for free such as the Expensify, Spendee, Money Lover, or Mint app. You can also do the old school method by creating a ledger. Knowing where your money is going is just the first step! Working together is all about transparency.

Sources: 1 & 2

 

 

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8 Money-Saving Hacks for Young (& Broke) Adults

Saving money when you are young and broke can seem like an impossible task. With the right mindset and strategy, you can save money despite the hurdles ahead. Putting your spare cash each month can make a world of difference. All you need to do is be willing to commit to your financial goals! The following hacks can help.

#1: DRINK MORE WATER

You will save more money if you stop buying bottles of soda and cups of take-away coffee. Bottled water is cheap and tap water is cheaper. There are many great options for filtering your water if you are not a fan of water from the tap. Nonetheless, eating out with a family of 3 can easily save you money just by drinking water alone.

#2: GET A PART-TIME JOB

If you just graduated and you are trying to reach a goal that seems to be taking longer than expected, you can get a part-time job. This job can be a temporary solution to get past whatever situation you are in. Moreover, it is a wonderful way to pay off your dues and debt. If you are building an emergency fund, having another source of income can aid your quest. Market your skills online to boost your job search.

#3: CREATE A MEAL PLAN

Whether you are living alone or living with your roommate, you can save more money by planning your meals. It eliminates food wastage and helps you create more affordable meals. Rather than buying what looks good at the grocery store, you can opt for budget-friendly alternatives to complete your dishes.

#4: CANCEL YOUR UNNECESSARY MEMBERSHIPS AND SUBSCRIPTIONS

You are cash-strapped! You do not need your hefty gym membership or subscriptions to different music and entertainment apps. Think about all the wasted money because of not taking the time to cancel the things that you no longer use.

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#5: ALWAYS BRING A SHOPPING LIST

One of the easiest ways to go over budget is going inside the grocery store without a plan! If you do not want to spend too much money in one place, always bring a shopping list with you. Only go down the aisles that you truly need to grab what you need. Skip the rest!

#6: KEEP YOUR SAVINGS ACCOUNT SEPARATE

Are you breaking because of your shopping habits? Keeping this from happening again by having your savings completely separated. Find an online savings account or open a separate checking account. Make it a little more challenging to take money out of your savings. Your future self will thank you.

#7: EMPLOY THE 30-DAY RULE

When you are considering making large purchases, use the 30-day rule. If you still want it just as much after 30 days, consider saving money for it. Having a waiting period eliminates impulsive purchases made out of excitement or other overwhelming emotions.

#8: DO REGULAR CHECK-INS

Before spending a large amount of money on a significant purchase, have your trusted partner or friend assess the situation with you. Have regular check-ins to look into your current financial situation. This might sound silly at first, but it can keep you from spending money impulsively on things that are not in your budget. Find someone that can help make you accountable for your spending.

Sources: 1 & 2

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Having a Credit Card is Not a License to Spend

Convincing yourself that you are not spending real money is easy when you charge for items on your credit card. Technically, you are correct! You are not spending money, in fact, you are borrowing money.

Using your credit card means that you will have to pay the bill eventually. The promise of small minimum payments can entice you into thinking that these purchases are bargains. Unless you pay back the purchase immediately, you will not feel the pain of the bill for another month.

Be responsible with your credit card by treating it like cash and swiping only what you know you can pay back in full. You can reap its benefits by using your credit card in the following situations.

#1: GROWING YOUR REWARD POINTS

Many credit cards provide reward points for certain categories of spending like groceries, gasoline, air fares, and restaurants. When earning thresholds are reached, points can be redeemed for travel, shopping, and more. Choose a card that best suits your spending patterns.

#2: PAYING RECURRING BILLS

As long as you make payments on time, recurring payments will keep that line of credit open so you can continue to maintain or boost your credit score. Any recurring payments you have such as subscription on Spotify or Netflix can be paid through your credit card.

#3: SHIELDING YOU FROM EMERGENCY

Are you ready for unexpected expenses? When this happens, you need some time to cushion the blow. You can use your credit card in case of an emergency, including fixing, changing your tire or repairing a broken window. Be sure to repay more than the minimum on your credit card payments to avoid unnecessary interest.

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#4: SHOPPING ONLINE

Senior Industry Analyst at CreditCards.com once said: “Chip-enabled cards are very good at deterring in-person fraud but that doesn’t help you online, and that’s where most of the fraud has gone.” You can use your credit card when shopping online instead of shopping with your debit card.

Check your browser and shopping apps to ensure that your debit card is not saved on any of these platforms. You can either add your credit card information or delete all your card information to make it harder for you to overspend online.

Sources: 1, 2, & 3

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6 Tips to Attract Luck during Ghost Month

What is Ghost Month?

Ghost Month is the seventh month of the Chinese Lunar Calendar. Because the Lunar New Year falls on a different day each year, the start of Ghost Month also varies. For 2022, Ghost Month started last July 29 and will end on August 26.

The Ghost Month, according to Chinese tradition, is the period when souls are given a “one-month pass” to roam among the living. This festival also pays respect to the homeless spirits, or those without families. China, Singapore, Taiwan, Malaysia, India, Thailand, Vietnam, Japan, and Cambodia are just some of the countries that observe Ghost Month.

Many people take precautions during Ghost Month to avoid running out of luck. After all, there is no harm in being extra careful. On that note, here are 6 Tips to Attract Luck during Ghost Month.

#1: POSTPONE YOUR MAJOR PURCHASES

Ghost Month typically brings uncertainty. Use this time to plan your purchases, especially on major items that you do not urgently need. If you are thinking of purchasing a new camera or gadget, postpone your purchase to the following month when you are more certain about your funds. Plan your budget and allocation ahead of time.

#2: STAY AWAY FROM UNNECESSARY DEBT

Apart from impulsively spending significant amounts of money, borrowing money during Ghost Month may not be the best idea. If you are planning to use the money on unnecessary purposes, you have to slow down. Prioritize your needs and pause any huge spending until things start picking up.

#3: EVALUATE YOUR BUSINESS PLAN

Starting a business during Ghost Month is often ill-advised as many investors take a break during this time, which can influence the economy. Use this period as an opportunity to recalibrate your business plan. Ensure that you have everything ready before you finally launch your business.

#4: DO BURN PAPER MONEY, INCENSE, AND CANDLES

The candles and incense will help light the spirits’ way. While paper money will give them wealth in the afterlife. If you have budget to spare, you can treat them to other creature comforts like paper car.

#5: LIGHT UP YOUR HOME

It is said that spirits tend to lie in wait in dark and rarely used corners of a home. Bring positive energy to the space by adding lights. Put lights in hallways and corners. If the space does not have a lighting fixture installed, here is your chance to put a decorative floor or desk lamp. You can opt for energy-efficient LED bulbs. Apart from being earth-friendly, this option is also economical.

#6: WEAR BRIGHT COLORS

Hungry Ghosts are attracted to muted or dark colors such as black, gray, and dark blue. Bright colors may keep them at bay. Pick cheerful colors for your sheets, curtains, pillowcases, and more. Shades of yellow, orange, pink, green, red, and pastel encourage positive energy and uplift the mood.

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Sources: 1, 2, & 3

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