Make Sense of Your Money: A Guide to Better Money Management

There’s no way around it – everyone has to deal with money, whether you want to or not. The sooner you can come to terms with that reality and learn to better manage your finances, the better you will be able to control your future and make smarter decisions in the present day. If you’re looking to take control of your money but aren’t sure where to start, this guide on making sense of your money will help you get there faster than if you try to go it alone.

Money is as much of a psychological game as it is a math and data game. Getting into the right mindset is the key to success in life. Throughout this blog i have left links to some finance books that helped me grasp a better understanding on money and helped me reach my financial goals. The book "The Psychology of Money: Timeless lessons on wealth, greed, and happiness" was a book that was the stepping stone for me to make sense of my money.

The Psychology of Money: Timeless lessons on wealth, greed, and happiness:

https://amzn.to/3EsJpiR

Track your expenses

This method is simple, yet it's the most effective way I've found to get a better understanding of where my money is going. Start by making a spreadsheet with two columns. The first column should be labeled Date and the second should be labeled Expense.

In the Date column, list every date that you have spent money from as far back as you can remember and continue to do this in the future. You can use you bank app to help you track this by taking a look at your recent transactions.

Set up a budget

If you're trying to make better sense of your money, a great place to start is by setting up a budget. Write down all the income you have coming in and then figure out what you need for monthly expenses. Once this is done, it's time to create an action plan for how you'll spend less.

How to Budget & Manage Your Money: Financial Planning Book for Beginners. How to Save Money Faster, Pay Off Debt and Control Your Finances: 1 (Smart Personal Money Management Series):

https://amzn.to/3UzL1ge

Automate your finances

Automating your finances can help you make sense of your money. It's not as hard as you may think.

First, get a budget app like Mint or You Need a Budget and start tracking where all your money is going. Next, set up automatic bill pay with your bank so you never have to worry about forgetting an important payment again. Lastly, automate savings by setting up monthly transfers into your savings account from checking so it doesn't take willpower to save for the things you want someday.

Invest in yourself

Investing in yourself is the best investment you can make. Whether it's for your business or for your personal life, investing in yourself will put you in the best position for success. If you're looking for guidance on how to invest in yourself, here are a few places to start.

1. Get an idea of your cash flow and budget. Also you can, start saving money immediately by paying off debt and spending less than what you earn each month.

Save for retirement

If you're saving for retirement, it's important to know the difference between a Roth IRA and a Traditional IRA. A Roth IRA is a retirement savings account where the money goes in after taxes are paid. Withdrawals are tax-free so long as they occur after age 59 1/2. With traditional IRAs, there is no income limit and contributions can be deducted from taxable income.

Journey Towards Early Retirement Through Real Estate Investing: Creating A Pension In 5 Simple Steps:

https://amzn.to/3g2ukLm

Live below your means

Living below your means is an important step in making better sense of your money. Living below your means means having a lifestyle where you spend less than you make and save the difference. It's important because even if you earn $100,000 per year, if you live like someone who makes $50,000 a year then it's likely that in just 10 years, you will have saved up enough for a down payment on a home.

Finance Book, The: Understand the numbers even if you're not a finance professional:

https://amzn.to/3Aa3fNj