Personal finance management is something which requires much of your attention. You just can’t afford to be too casual with finance management as this casual behavior may lead you to serious debt problems. That’s why you must make it a point to take care of your financial obligations and manage debts on time so that you can live a financially stable life.
Why managing money efficiently is so important?
Managing money astutely is as essential as breathing. You must never miss such an important chore. Whether you earn profusely or not, you must make it a point to take care of your savings. Following are the benefits that you’ll be able to reap by managing money:
- You get to build adequate amount of wealth to secure your future.
- It becomes easy to be financially ready always.
- Debt problems never turn out to be devastating.
These are the 3 basic benefits for which you must definitely make it a point to manage finances carefully. After all there can be nothing better than living a life without any financial crisis.
How tough is it to manage finances and debts efficiently?
Managing debts and finances are essential but not difficult. You only need to be a little bit of disciplined to make the whole process work for you. Wondering how to be more responsible towards your financial life? You must go through the following section to get the answer:
- Be on a strict budget: Budget is the key of a successful financial life and you must follow it without any miss. It’s not that tough to formulate a budget plan. You only have to calculate your income and expenses and plan a budget so that at the end of the month you can also save a few bucks. Various budgeting apps and financial experts are also there to help you with a budget plan. You must also make it a point to follow your budget plan rigorously. Only by following a shoestring budget you can be at the top of financial strength.
- Manage credit cards with care: You really need to control your whims and use your credit cards with care. If you’ll use your credit cards carefully, then the chances of facing credit card debts will reduce. You won’t have to pay off any extra interest rate on the due credit card bills and it’ll be easier for you to manage finances successfully.
- Do away with your bills as they arrive: Managing bills efficiently is actually a part of finance management. Never let your due bills take a toll on your wallet. It’s obviously important to pay your bills well on time to manage all the financial obligations successfully. In this way you’ll also be able to avert debts. So definitely it’s a better idea to pay bills on time.
- Spend according to your income: This is what every person must follow. A balance must be there between your expenses and earnings. Of course your budget plan will help you to maintain that balance. Apart from that you must also control your lifestyle to limit your expenses. This is very much important to manage finances and control debt effectively.
It’s not possible to foresee when a financial emergency will appear in your life. So, it’s better to be ready for every consequence. Financial planning isn’t something which you may follow once in awhile. You need to be determined and persistent in your efforts. Otherwise, you’ll never be able to manage your finances efficiently and living a debt free life will remain a dream only. So, start managing your finances successfully to solve your debt problems and live a tension free life.
About the Author: This article has been put forward by Benjamin Beckwith. He has profound knowledge on the contemporary financial issues that have recently affected the nation. He contributes his articles to different financial blogs, communities and websites.
Carn. of Financial Camaraderie at PF Carny
Carnival of MoneyPros at PF Carny
Yakezie Carnival at Edward Antrobus
Carnival of Retirement at Gen Y Finance Journey
There definitely needs to be a healthy balance between what you make each month and what you spend each month. No one wants to live paycheck to paycheck!
Acting responsibly financially is the most efficient method for personal finance. Suddenly, it is much easier to manage your life when you don’t have to juggle everything to just survive.
Michael | The Student Loan Sherpa says
I wonder how many people live paycheck to paycheck unnecessarily. I know I did it for a while, but I hope my lesson is learned. There is a lot of stress in that form of financial management.
It is very easy to fall into routine of spending! I avoid carrying cash just because I find easier to spend.
No Waste says
Break bad ones and start good ones to make fiscal responsibility easy.
Set a plan and stick to it to make that easier. Reward yourself if that what it takes, but the best time to change habits for the better was yesterday.
I always recommend small changes because change is difficult! For example, I started taking my lunch to work one day a week about 40 years ago. Within a month or two, I increased it to 5 days a week.
DC @ Young Adult Money says
It’s hard to be (or even feel) in control of your money if you aren’t actively managing it. I don’t think it’s the funnest thing you can do, but it definitely has both short-term and long-term benefits. I would say looking at your income and how you can better allocate it towards monthly expenses, savings, and debt paydown is an ideal place to start.
I agree! I view my (net) income as my limit and take out savings first. I analyze my expenses to keep them reasonable which is another way of allocation. I am only willing to incur debt if it is an asset that will appreciate. It has worked very well for me.
Simon @ ModestMoney says
I agree with “No Waste”, habits form the cornerstone of managing our finances. Most people can make a budget as it is, its sticking to it thats the greatest hurdle. Maybe to add, I think automating some of our financial decisions and transactions could help, eg, having our savings deducted from our paycheck before we even get the money and also paying some of the bills automatically. You then get to budget on what remains and ofcourse, you will be extra cautious with it!
Budgets. are the structure for achieving your financial goals,butyouneed a compelling reason to stickwithit
Andy Hough says
This is why I like to track every penny I spend. It makes me feel in control of my money.
Good point! It is one of the reasons I charge everything. It makes it easier to track and control my expenses.
The College Investor says
I disagree that you have to be on a “strict” budget. In fact, I would challenge that if you make your budget too strict, it could be a derailer rather than a helper.
You do need a budget – something that can help you plan for and keep track of income and expenses – but if you make it too rigid, you could ditch it quickly or not even follow it.
Perhaps, I should define strict! A budget you can stick with and will because it is working for you. I always include some buffer (miscellaneous) so I won’t be discouraged and quit.
The College Investor says
That’s a good call. I also think using some software like Quicken or Mint, and taking the average spending over 12 months is a good way to start.
Thanks, but be careful with averages particularly if it is increasing. You don’t want your expenses increasing!
Mr. Utopia says
So many people don’t follow a budget or manage their finances because they just don’t know any better. We live in a pretty consumption driven world and budgeting often gets in the way of fulfilling those desires. Either that or it’s deemed too much work. Sad to say, but that’s why so many end up in too deep and in debt.
Very true! It is one of the reasons you need a compelling reason to follow your budget. After all your budget is supposed to help you achieve your financial goals. That should be compelling enough in itself!
old habit die hard……and i don’t try hard….
It is always difficult to change, but you can make small changes! Making small changes can lead to success!
Greg @ Thriftgenuity.com says
Budgeting is never my idea of a good time, but bottom line, it needs to be done in order to meet financial goals. We are getting started on my wife’s med school loans and I want to watch every dollar so we can get rid of the debt as quickly as possible.
Careful, I made a career out of budgeting and it was fun for me! I do realize a personal budget is different. Just remember to keep your saving and investing a priority too
I agree about being on a strict budget. The stricter we are, the more we save. When we stop paying attention to our budget is when we get off track!
I believe in a strict budget, but I also have a buffer in miscellaneous.
Daisy @ Prairie Eco Thrifter says
Debt dilemmas seem to crop up often for some people. It always happens to be for the people who don’t manage their money competently. I think the issue is education. Most know how and where to find education on money, but don’t take the initiative.
Money similar to food is something you use every day, everyone should do something about it!
Paul @ The Frugal Toad says
It is so important to develop responsible money management skills as a young adult when income levels are lower and the risk of using debt to fund lifestyle expenses is higher.
I think it is always important and it bears fruit as you develop more of a credit history.
Its been said many times before, but its so important to make a budget for yourself and stick to it. Put the time and effort into a plan and you will reap the rewards when it comes to saving money. Remember to always compare and shop around.
I have often said that you Need a compelling reason to keep you on track. Holding yourself accountable by monitoring your progress is also important.
I follow a very strict budget. I wish I didn’t have to, but for now I know it is the best thing for my family. The end result is to be debt free and financially secure.
Good for you! Managing your money well means you can reach your financial goals.
anthony a. @ financial freedom ideas says
Live beyond our means. If we want a higher lifestyle, increase income capacity to compensate the desired living. We really need to work on a budget. It will end into debt if we go beyond it. For the meantime, work diligently and find other source of income to reach our desired lifestyle.
You should always live below your income! A budget is just a structure to help you reach your financial goals.