improve your financial management

The ability to Manage your finances is not only about you spending less and you saving more, but it is about you developing lovely and smart habits that would give you long-term stability and also help you with freedom.

Photo credit

improve your financial management with these methods.

1. Create a realistic budget
   This does not mean that you have have to deprive yourself of everything good , but rather you need to know exactly where all your money is going. You should try your best to make Use of the 50/30/20 rule:

50% for needs (rent, food, transportation).

30% for wants (going out, entertainment).

20% for savings and investments.

1. Spend with intention
   Before buying something, ask yourself: Do I really need it? Or can I find it cheaper or secondhand? Sometimes, what seems essential is just an impulsive desire.

2. Avoid unnecessary debt
   Don't use credit cards as if they were free money. If you do use them, pay them off in full each month to avoid interest. And if you have debt, prioritize paying it off, starting with the ones with the highest interest.

3. Save before spending
   Many people save what's left at the end of the month... and there's almost never anything left over. Instead, set aside a fixed percentage of your income before you start spending. Automate this process if you can.

4. Create an emergency fund
   Keep at least 3 to 6 months of essential expenses in an easily accessible account. This will prevent you from falling into debt in the event of a crisis.

5. Learn to invest
   The Money that you keep in the bank do lose value over time and what causes it is inflation. So you should Learn about safe investments like the index funds, learn about real estate, or even learn about cryptocurrencies , but make sure that you don't risk money you're not willing to lose.

6. Increase your income
   If you rely solely on a paycheck, your finances will always be limited. Look for ways to generate extra income: sell something, offer a service, invest, or learn a new skill that will help you earn more.

7. Educate your financial mind
   Read books about finance, follow experts, and constantly learn. Understanding how money works will give you power over it.

Posted Using INLEO