When it comes to money management and budgeting, it’s often said there are two types of people: Spenders and savers. But there are plenty of people who fit somewhere in the middle. These individuals often understand the importance of good money management, but might lack the skills to do it successfully. Thankfully, our new free Money Management and Budgeting Guide walks you through the entire process, from setting up your financial goals to building a personalized budget. Here's how our guide can set you up for success!
How to Manage Your Money Successfully - The Basics
Good money management starts with taking a good hard look at your monthly income. You need to know how much money you have coming in on a month-to-month basis. If your income is irregular or fluctuates, take the least amount of money you expect to earn in any given month and use that figure as your monthly income. Your next step is to tally up all of your monthly expenses. Once you have your total monthly expenses, compare that number to your total monthly income. Ideally, you'll want a surplus, which means your monthly net income is higher than your total monthly expenses. If that's the case, you could start putting some money towards savings, a financial goal you have in mind or building up an emergency fund. But if your monthly expenses exceed your income, you'll have to be a bit creative to balance out your budget.
How to Overcome Ongoing Money Problems
Sometimes when you run into trouble managing your money, it’s simply a matter of income — too much going out and not enough coming in. While other times the simple act of having a monthly budget and sticking to it can resolve most money issues. For example, many of our clients at Credit Canada are able to overcome debt and increase savings without having to significantly increase their income or drastically change their lifestyle. All they do is adjust their monthly expenses to accommodate the money they have. For instance, they might take in a roommate to decrease housing costs, switch to a cheaper cell phone and internet provider or plan, get rid of cable TV and/or gym memberships they don't use and instead exercise outdoors, etc. The best part is that once you have a good working budget, you can start building a healthier relationship with money.
Money Management Red Flags
Where do you fall on the money management spectrum? Below is a list of money management red flags. If any of these sound familiar to you, they could be early warning signs that you could use some extra help managing your money.
- You are late paying your rent/mortgage and utility bills.
- You do not save a percentage of your net income every time you get paid.
- You don't have an emergency fund for unexpected costs and expenses.
- You don't plan ahead for large expenses, such as taxes and insurance.
- You haven't set any financial goals.
- You don't have a working budget for your net income.
- Over 20% of your net income goes towards paying your debt (i.e., credit card payments, mortgage payments, etc.)
- You don't comparison shop for products or services.
- You use your credit card(s) regularly but DO NOT pay the balance in full each and every month.
- You don't balance your budget with your net income every month.
Finding Money Management and Budgeting Help
Sometimes we don’t give ourselves enough credit. For example, we might be struggling with very little money coming in, but still doing a great job making the most of it. While other times we might think we’re doing a great job, when in fact we have one foot in a financial hole. Fortunately, anyone can start practicing better money management skills today, and our new free Money Management & Budgeting Guide can help! It includes:
The 10 Basic Rules of Money Management
Financial Goals Worksheet
Sample Letter to Your Creditors (if you run into problems paying your bills)
Credit Rating Guide
Over 100 Money-Savings Tips!
Get free expert advice for your debt and money
Don’t wait to get started, download our free guide today by clicking here. But if you feel like you can’t keep your head above water and no guide can help, give us a call at 1.800.267.2272. Our certified Credit Counsellors can provide a free financial assessment to explore your debt relief options with you, including debt consolidation, and provide money management advice specifically for you and your situation. All of our counselling is 100% free, confidential and non-judgmental, so there’s nothing to lose and a lot to gain!