Money Management

Income
One of the first steps to successful money management is to keep a good watch on your income, or how much money you make. You may think at first that a job paying you $8.00 an hour for 40 hours a week will give you $320.00 but this is not true. Your actual income will be $320 minus tax deductions and benefits such as health insurance. When you think of your income, think about in terms of the actual dollars you get to take home. Add up all your income for a month, including wages, tips, child support checks, public assistance, food stamps and any other form of profits.

Expenses
Another important aspect of taking care of your finances is knowing exactly where your money is going. Keep track of how you spend it. Write down all your monthly bill amounts like rent, phone service, cable TV, car payment, child care, insurance, credit card payments and alimony payments. These bills tend to remain consistent. Then for one week, keep a record of other expenses such as groceries, meals eaten away from home, bus fare or gas for your car, clothes, music, movies, magazines, nights at the club and other entertainment expenses. Once you get an idea of how much in a week you spend, multiply it three and a half times to get a better idea of how much you spend in a month. Finally add these expenses to your monthly bill amounts to see how much you spend in a month. A helpful resource that can help you calculate payments for student loans, auto loans, mortgages and other living expenses is at www.mortgageloan.com/calculator/

Saving Money
Once you figure out your income and expenses, you already are getting a better idea of how to manage your finances. If your expenses are larger than your income, you're in debt already. If the two amounts are close together, now is the time to start saving some of your money and figuring out how to avoid going into debt. If you've never saved money before, start small. Create a goal for yourself to save a certain amount of money within only a few weeks or months.

Maybe you want to go to a concert at the Gorge and tickets are close to $60. Taking $60 out of your monthly income might lead you to eat just slurpees and potato chips for three weeks. Save money instead! Plan for it and put $10/week aside somewhere. In less than two months, you'll have your concert ticket without losing your health. Don't be discouraged by spending your savings. You deserve to award yourself a little. Make consistent goals and just get in the habit of it. Saving a little each week will prepare you for unexpected expenses like a car repair or a trip to the vet.

 

 

 

1.How can I lower my debt?

2. How can I cut costs when I already don't go out much?

 

 

 

 

Start Now

You may not have a consistent income or any regular expenses but establishing good money management habits now will pay off later. Keep track of how much you spend on little things like jewelry, music, convenience store items and games. As for a savings plan, put all your coins into a container you can't see into. You'll be less tempted to dig into it and when you need money for something special, you may be surprised how much you've saved.