5 Important Money Management Tips By Kamal Hinduja You Must Know

Managing money can be tricky, and it often brings up feelings of worry sometime. Maybe you are a little late for retirement savings, or you're concerned about not having enough emergency funds. Whatever your worries are but remember now is the perfect time to take control of your finances. It's important to start building good financial habits right away. Here are the 5 most helpful money management tips to help you get started.

Tip 1: Know Your Money Priorities

It is very important to figure out your priorities before budgeting. If you skip this step, you won't fully commit to your financial plan. You have to be focused to match your money goals with your habits. That focus should be based on what is the most important in your life right now. For example, if thinking about your credit card debt makes you anxious, paying it off should be your top priority. Then you must cut back on other categories to save at maximum capacity for your true priorities.

Tip 2: Track Where You Spend Your Money

It’s high time to take a closer look at your money. To understand your spending habits, do a little research into your expenses. If it is too much, start small by reviewing just one month’s worth of spending. Bring all your financial records, like credit card statements, housing and utility bills, bank statements (including ATM withdrawals), and payment records from apps.

Writing down all your expenses on paper and organizing your spending into categories can make this process easier. You could use broad labels like needs, wants, and savings/debt and if you want to make it clearer, you can write it in a detailed way- categories like entertainment, food, travel, and transportation. How detailed you get is completely up to you. It will help you to understand your expenses so that you can manage it accordingly.

Tip 3: Have a Plan

Once you know how much you earn and spend, it’s time to create a plan. A good financial plan aligns your priorities with your spending habits.

For example, if fitness is your passion, you might notice that you regularly spend time on a gym membership, yoga classes, and new workout gear. Since that’s important to you, you don’t have to cut it out. But if your priority is building an emergency fund, you’ll need to save money elsewhere—like shopping at discount grocery stores or bringing lunch from home instead of ordering takeout with coworkers.

Tip 4: Stick to the Plan

Everything will be wasted unless you're not sticking to your plan wisely. The best way to get into a habit is to stick with it for at least a month. That’s enough time to see if it works for you. Anything shorter, and you might miss the benefits of tracking your finances. Pick a budget that suits you, get started, and stay committed. To stay motivated, Washington suggests using visual reminders of your goals. For example, if you’re saving for a house, put up pictures of your dream home to keep your goal in focus.

Tip 5: Save Early and Often

The sooner you start saving, the sooner your money can grow with interest. This rule works no matter what your priority is. You don’t even need an investment account to earn interest. Many great savings accounts offer interest and are FDIC-insured, so your money is safe compared to a brokerage account.

Even if retirement feels far away, starting early savings with an IRA or 401(k) is always better. The earlier you begin, the more time your money has to grow.

Bottom Line

“You will either manage money or the lack of it will manage you.” The best way to build financial security is to get a grip on how and where you’re spending your income. and then plan accordingly and stick to it! Of course, life can throw you off track sometimes, but that’s OK. If you get back on budget, a hiccup here or there won’t destroy your future financial success.

Disclaimer: This article is for informational purposes only. I, Kamal Hinduja, am not offering any business services through my articles and cannot be held responsible for any financial losses.