If you want to master your money management skills, you are in the right place. Here are some tips that will help you achieve your financial goals.
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.