Become an expert: tips and tools to master your money management game

Become an expert: tips and tools to master your money management game

Many surveys show that Americans are stressed about money. If you are part of the two-thirds of adults that say they worry about their finances, here are 5 less-stress tactics you can put into practice.

1. Build a financial safety net

If you’re feeling stressed about money, the first step to help you deal with it is to get into the habit of saving. Start by making a commitment to save a part of each paycheck and have the funds automatically deposited into a savings account. 

The secret to being able to do this is to build a budget that will work for you and start an emergency fund.

2. Start investing

Investing isn’t just for Wall Street tycoons, and it doesn’t take a lot of time or capital to get started, and if you move from focusing on short-term goals to investments that help you achieve longer-term objectives, like saving for college or retirement, you’ll feel much less stressed about your financial future.

3. Analyze your regular expenses and bank accounts

The “bucket approach” to budgeting is a way to organize your regular expenses and be sure which bank account to use for what.

This approach means lumping expenses into categories and creating separate accounts to manage each category. 

4. Use digital finance tools

If you think budgeting could take more time than you have, technology is on your side. Using the right digital budgeting tools and apps can make money management much easier.

 Here are a few smart tips for tapping into them:

•    By using budgeting apps, you can identify and then avoid unnecessary expenses.

•    Set a savings goal and then use a financial goal calculator to help determine what you need to save monthly to reach your goal. 

•    Use digital coupons and deal sites regularly. 

5. Get rewards for your spending

Even if you’re feeling good about your savings habits, you may still feel stressed about money when you spend. This stress can be exacerbated when you’re spending on discretionary or “fun” expenses, even if they fall within your budget.

If you feel uneasy when you spend money on “fun” things, another way to stop stressing is to have rewards checking accounts and credit cards.

Great financial tips to help you achieve your goal

Earning money is one thing, but being smart when it comes to managing it is something completely different. We usually have to create plans in order to achieve our goals. We budget over and over again and try to fit our dreams into our finances.

Here are some tips to make the journey a lot smoother:

Try cash only for a while

Online banking, credit and debit cards and budgeting apps are extremely convenient, but when it comes to really know where you spend your money, it might be a good idea to cash only for a little while. This way, you will really internalize where your money is going. Carrie Schwab-Pomerantz, board chair and president of the Charles Schwab Foundation suggests people try a “cash diet” where they can take a week or two of just using cash to be a bit more mindful of their spending habits.

Balance goals for the short and long term

A good financial plan will work both for short term plans, like going on vacation and for long term plans, like saving for retirement.

Experts usually say that millennials tend to focus on experiences that tend to be expensive, so it is important to think a little bit more long term too. A good and simple way of doing that is by maximizing your 401(k) contributions, particularly if there is an employer match.

Budgets shouldn’t be too rigid

Budgets should work with your life. If you feel your budget is too depriving, you might be doing something wrong.

Kathy Cummings, senior vice president of homeownership solutions at Bank of America, says that budgets shouldn’t be intimidating, because you don’t have to track every single penny. As long as you get the idea, you’ll be fine. “No months are alike, so it should be a bit more fluid”, she says.

6 free software to help you manage your personal finances

If you feel very overwhelmed when it comes to budget planning and other activities related to your personal finances, stop worrying! You don’t have to do it all by yourself.

1. Personal Capital

You can find this solution online and for free! It has a simple interface, even though it may not be the best option for absolute beginners. You’ll receive detailed reports each day, week, or month, which is achieved by linking all your financial accounts.

You can receive real-time tracking for them, as well as some very advanced features for budgeting and money management.

2. Mint

Its simplicity -and the fact that it’s free- makes it easier for everyone to create budgets and set financial goals. You can receive customized budgeting and money tips, which allows you to get a complete perspective of your finances. If there are account charges, you’ll be alerted in order to safely avoid any fraudulent transactions. This, amongst other precautions that you should take when shopping online with credit cards, can help you avoid unauthorized charges on your account.

3. GnuCash

Even though its interface isn’t the most appealing, it can easily help beginners through the process of entering the information and using the program. It’s easy, free and a good tool for business owners. The platform works like a traditional checkbook register, and includes both complete customer support and regular updates.

4. Mvelopes

This online budgeting resource follows the envelope system, which works by dividing each week the paychecks into envelopes destined to pay bills. You can customize it according to your budgeting goals and make use of the software’s features for expense tracking and debt elimination. The community is very active on forums and support systems, which can eventually help you a lot. There’s a free version but also a paid one that costs $95 per year.

5. WalletHub

This app is also free, although it focuses on your credit score and helps you manage it. This is why it has no budgeting features. However, you’ll find a free credit score checker and a clear analysis of your score. It’ll help you find credit cards and lenders and, most importantly, it’s the key to achieve credit-worthiness.

6. YNAB (You Need A Budget)

This personal financier will give you a better understanding of finances and money management. It’s free for college students, but others only need to pay a small fee: $5 per month or $10 per year. It helps you build your budget without handing you all the solutions. This means that you’ll learn how to set up finances and what fiscal responsibility is. Your finances will be plotted to the last dollar!

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