INSIDE: If you’ve ever got to the end of the month and wondered where all your money went, this post is for you. In it, I’m sharing six simple things you can do today to manage your money better. Give these a go and you’ll be spending less and saving more before you know it!
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How to manage your money better…
It’s the end of the month. Logging into your bank account to see how much money you have left, you discover to your horror that it’s all gone. Your balance is a big fat zero! Staring blankly at the screen, you wonder what on earth happened. Just where did all your money go?
Panic rising and convinced someone else must have accessed your account, you quickly scroll through your transactions looking for signs of unusual activity. But there aren’t any. With a giant knot forming in the pit of your stomach, you realise that it was all you. Yet again, you’ve unwittingly spent all your money. Worse still, with nothing to show for it, you have absolutely no idea what you’ve spent it on.
As terrible as you feel, it’s not the first time it’s happened. Having recently run your account dry more times than you’d care to admit, you know drastic action is required. It’s time to reign in the over-spending and sort out your finances once and for all.
But where do you start? Just how do you begin to manage your money better? Here are six easy ways to take back control of your finances that you can implement today.
Six easy ways to manage your money better…
#1 | Understand your money goals
It might sound obvious, but if you want to manage your money better, you need to first understand what your money goals are. And that means knowing why you want to switch things up. So, what’s prompting your need for a change? What do you hope to gain by getting a better grip on your finances?
Maybe you have loans or credit cards you want to clear so that you can finally become debt-free. Maybe you’re wanting to save for something specific like a house deposit, holiday or car. Or maybe you’re spending more than you earn and you want to break the habit once and for all.
Whatever the reason, knowing your ‘why’ and understanding your money goals will make managing your finances and sticking to a budget a whole lot easier. Spend a little time thinking about your money goals. Write them down and keep them close to hand for whenever you need a little motivation to stay on track.
#2. | Operate a zero budget
Tell your money what to do and where to go by operating a zero-budget. Far less scary than it sounds, a zero-budget is simply a way of accounting for every penny you have and spend – including what you spend for fun.
My Hubby and I have been operating a zero-budget for a few years now and I can’t tell you how much easier it’s become to track our spending. Instead of getting to the end of the month and wondering where all our money went, we know exactly what’s been spent and what we’ve spent it on.
If you want to manage your money better, I thoroughly recommend giving the zero-budget a try. Check out this post from Jenny over at Cook Eat Go – it has a great step-by-step guide that walks you through how to set one up.
#3. | Pay yourself first
If starting a savings account is one of your money goals, make sure it’s your next priority after paying all your bills and fixed expenses. Jen from Hairs Out of Place has the perfect solution for making sure this happens. To avoid the temptation of skipping paying into your savings she advises “setting up an auto-transfer from your main account to your savings account”.
My Hubby and I have had a standing order that pays a set amount into our savings account the day after payday for a while now and it’s made a massive difference to how quickly our savings have grown. All we did was work out what our expenses were and subtracted that from our income. Then we agreed on a set amount we could afford to pay into our savings account each month. Now our savings grow month-on-month without us having to think about it.
#4. | Use the cash envelope system
One of the best ways to get started if you’re new to budgeting or you need to be careful about what you spend is to use a cash envelope system. This worked brilliantly for my Hubby and I when we were first together. Not only did it help us curb our spending, it saved us a lot of money too.
Simply decide on your budget categories (e.g. groceries, bills, clothing, spending money etc), have an envelope for each, write on the front what it’s for, put the agreed amount of cash in it and use it.
This works because you only have a limited amount of cash for each category. Once it’s gone, it’s gone. It gets rid of the temptation to spend more than you need because there’s no ‘tapping the card’. Swapping cash from envelope to envelope is forbidden too. For tips on how to get started using the cash envelope system check out Shannon’s post over at The Freckled Foot Doc. She even has free printable envelopes for you download and use!
Don’t like using cash? Try digital envelopes!
If cash envelopes aren’t your thing, try doing it online instead. Open several online savings accounts and think of them as virtual envelopes. Kristen from Joyfully Thriving has this down to a fine art. Find out how she does it in her post Why We Have 15 Savings Accounts and are Opening More.
#5. | Reduce your expenses
You’ve created a zero-budget. You’ve automated your account to pay yourself first. You’re using the cash envelope system. Now what? It’s time to reduce your expenses! If you really want to manage your money better, cutting back on unnecessary spending is key. That being said, just how do you do it?
Spend less on groceries…
The easiest place to start is your food bill. Next to rent and mortgage, the grocery bill is one of the biggest household expenses. It’s also one of the easiest to reduce. Getting more organised with your meal planning and cutting back on what you spend each week at the grocery store can literally save you hundreds – if not thousands – over the course of a year. How do I know this to be true? Because we’ve done it!
At one point we were spending more than £250 a week on groceries. And we had no idea we were doing it until we sat down and tracked our spending. We were horrified! That’s more than £3,000 a year on groceries alone. Those last-minute daily trips to the store were costing us a fortune! Knowing we were wasting money we decided to get organised. We started planning our meals and shopped from our pantry first. That first month we saw a massive drop in our food bill. Now, as a family of four, we typically spend £90-£120 a week which saves us around £1,700 a year. That’s a LOT of money!
If you want to save money on your grocery bill, check out this post from The Curious Frugal. In it, you’ll find lots of great tips on how to eat well whilst on a budget. From how to get the best deals whilst at the store to making your food go further, you’ll find lots of great ways to reduce your food bill. There are lots of budget-friendly recipes too!
Switch to streaming services…
Another great way to reduce your expenses is to do what Brandi from Family Felicity has done. Just like us, she got rid of her cable bill and now uses alternative streaming services instead. We did this about four years ago and have never looked back. Instead of cable, we have an Amazon Fire Stick, Amazon Prime Video and Netflix. We also have the TV Player app downloaded onto our Fire Stick which gives us access to our favourite documentary channels too. Watching TV this way saves us around £500 a year.
Want to know how else Brandi cuts her expenses? Be sure to check out her post, Easy Money-Saving Hacks for Families.
Cutting back your expenses…
Ask yourself what your biggest expenses are after your bills and see where you can cut back. If you’re not sure where your money is going, do what we did. Print off a year of bank statements, grab a few highlighters and see what you’re spending on groceries, fuel, meals out, takeaways and non-essentials. No matter how well you think you’re doing, it’s a real eye-opener! My post How to Find Out What You Need to Budget Each Month takes you through how to do this step-by-step. It has a FREE printable for you to download that will make figuring out where your money is going even easier too!
#6. | Keep the momentum going
Now you’ve figured out what to do, be sure to keep the momentum going. There’s no point creating that zero-budget if you don’t stick to it! Instead of seeing it as something that limits you, consider it your ‘manage your money better’ best friend. Automate your bills, track your spending and stop yourself from going over budget by avoiding impulse purchases.
And if impulse purchases are something you struggle with, try adopting the 24-hour rule that Joyce from My Stay at Home Adventures uses. If there’s something she wants, she makes herself wait 24 hours. If the craving goes away, she knows she didn’t need it. It’s a great way of figuring out whether a purchase is necessary or not!
Managing your money…
Yes, sticking to a budget can be tough at times – especially if your cutting back leaves you feeling restricted. But resist the urge to throw in the towel. Whenever you need a little motivation to keep going, do what Jenny from Cook Eat Go does and “tell yourself why you’re doing it and know it won’t last forever”. As hard as it might be, don’t give up. When you get to the point that you can start to loosen the purse strings a little, it’ll make all that hard work worthwhile, I promise!
Implement these six strategies and within a couple of months, you’ll really start to notice a difference. Not only will your outgoings reduce, but your savings will increase too. And, as well as saving instead of spending, you’ll be safe in the knowledge you have all the funds you need. No more tapping your card hoping for the best!
Want a little extra help managing your money?
If you want a little extra help managing your money, I highly recommend the Master Your Money Super Bundle from Ultimate Bundles. With more than 40 personal finance resources, you’ll find EVERYTHING you need to pay off debt, budget like a boss and reach your financial goals. An awesome digital library of personal finance eBooks, eCourses and more, it will help you to do things like:
- Set up an easy budgeting system you can actually stick with.
- Learn proven ways to save money no matter your income.
- Take control of debt without feeling overwhelmed.
- Find smart ways to grow your family’s income, and
- Create a clear plan for achieving your financial goals.
Together, the resources are worth over $1,200. But thanks to a special partnership with the people who created them, you can get the entire collection for just $49.97! Find out more about the Master Your Money Super Bundle here…
That’s it for this post! Do you have a budget? What’s your top tip for managing your money better? Let me know in the comments!
Until next time…
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