Money Management Strategies

Having sound money management strategies is important. Its not how much money you make but how much of it you keep. If you can live below your means and know how to manage your money then youll become a millionaire so much faster.

Here are some money management strategies that will help you save more money:

• Use a program such as Microsoft Excel or other software to keep track of all your expenses, income and bonuses, and for budgeting. Its good to have a system to organize your bill paying and budgeting. Most people dont have a system and pay bills whenever they feel like it or when theres money. You need to plan ahead for those bills and have a budget. Then stick to that budget.
• Dont forget to pay yourself first and pay yourself at least 10 percent of your income. Put that money into a savings account, money market account, or an investment program where you dont touch that money.
• Develop or use a strategy that works for you. There are many budgeting and money management strategies but they only work if you use it.
• Using an envelope to put a certain amount of cash for each category and not spending anymore when that category runs out. Categories include entertainment, food, clothing, utilities, gas, miscellaneous, etc. You can use as many or as little categories as you see fit to proportion your money. The rule to follow is that the total budget of all those expense categories is 70% of your total monthly income. Ten percent of your monthly income goes to paying yourself first, ten percent goes to debt and ten percent goes to charities or contributions.
• Another strategy you can use is to use a small notepad to keep track of all your expenses for a month to see where your money is going then see if you can cut back on certain areas. It will give you a good idea the following month on how to budget your money better.
• Using a zero balance and low interest credit card to charge all your expenses and purchases for one month and pay it off completely when the bill comes. When you receive your paycheck, deposit it right away into an interest earning money market or savings account. Use that money to pay off the credit card bill completely.
• At the end of the year, youll have all that extra interest money. It may not be a lot but hey its extra money. Make the credit limit low enough so that you dont run up a huge balance by buying things you dont need. Make the credit limit $2-3k max. When the statement comes you can analyze the line-by-line expenses and see if you can trim down.
• Heres a strategy if youre spending more than youre making every month. Write or type in Excel all those fixed bills such as rent, utility bills, cell phone, car payment, car insurance, cable tv, internet bill, etc. Total up the amount.
• Is it less than your total monthly income? If it is, then good, now that the fixed bills are written done those need to be paid first before shopping trips, entertainment bills, eating out, clothing, buying CDs, DVDs, magazines, lattes, etc. Those things that you want and are nice to have are not necessities therefore you dont get those until your fixed bills are paid first. If you run out of money Im sure you can skip the coffee and the two or three movies you see per month. If you used the money for these flexible expenses first, what happens when the electricity or phone bill goes unpaid?

  Here is another page worth reading. It might be a refresher for those of you that are "finance" or "money" whiz.

  Successful Money Management