saving money in a piggy bank

Tips on How to Manage your Finances

Money matters shouldn’t be a headache. There are so many easy habits you can get into to save yourself money, and help manage your finances. You just need to be willing to implement them into your life. Here are some simple yet effective tips on how to manage your finances:

Pay yourself first

Before you spend your payday cash, set aside a small amount for yourself. This isn’t for you to spend now though, it’s for your future. No matter how much or how little money you make, you should set some aside in a savings account. It may be as little as $5/week, but that will add up over time. Only once you’ve put this aside can you spend the rest on bills, groceries, and other shopping.

Setting this up as an automatic payment in your online banking app means you’ll never have to think about it again. This basic practice can help ensure healthy finances in the future, so turn this into a habit ASAP!

Keep a budget and stick to it

Believe it or not, your ability to stick to a budget will determine your financial success in the future. Pinpoint your priorities and accordingly set aside a portion of your income for savings, utilities, and leisure.

Experts suggest allotting at least 20% of your income for financial priorities like savings, investments and emergency funds. Limit your lifestyle spending (expenditures outside of the basic necessities) to somewhere around 30%.

Be wise about your purchases

Purchases, especially big ones, need a lot of decision making. When buying new things, make it a habit to weigh out the pros and cons of getting them. Will the product add value to your life or make you more productive? Think about how often you’ll use them. Consider the price-performance ratio. Most importantly, avoid impulse buying as much as possible.

Start saving and investing now

Don’t put off saving for later. The earlier you start, the better. Save your extra income or increase your savings every time you get a raise.

When you think you’ve saved enough, don’t stop! Make your money work for you and invest. Websites like Sharesies allow Kiwis to invest with only $5. Work towards financial independence by checking out passive income sources like stocks, real estate, and affiliate marketing.

Go for goals

Set up smart goals for your finances. Thoughtful words aren’t enough, you have to back it up with actual figures. Keep your goals SMART: Specific, Measurable, Attainable, Realistic and of course, Time-bound.

Be efficient and keep your credit score healthy by setting up a financial schedule for your bills, taxes and credit reports. If you want to take it to the next level, you can even create a vision board for what your financial health should look like in the near future.

Cut back on unnecessary expenses

Is it the gym membership you hardly use? The pricey coffee you buy for when you’re extra stressed? Maybe it’s withdrawing money from another bank’s ATM that charges you every time.

These things may not seem like much at first glance, but they can add up and cost you a lot of money over time. Cut back on unnecessary expenses and unhealthy financial behaviors.

Mind the interest rates

Keep track of your interest rates. Whether it’s interest for your personal loans, savings account or investments, knowing your interest rates can help you make more informed decisions about your finances.

Hang out with the right people

Having friends with the same financial mindset is good for you! Hanging out with friends who go out every weekend spending hundreds of dollars is not going to be easy if you can’t do the same. Try to find friends in similar financial situations to hang out with. You’re not only creating relationships with people you genuinely like, but you’re also hanging out with individuals who can understand your decisions when it comes to money. Find folks who have the same goals and work together to achieve those goals.

Picking up a few of these habits will put you on track to financial freedom. If you’re struggling to keep up with costs in the meantime, feel free to contact us to discuss a quick cash loan.

Disclaimer: This article is intended to provide general information only. It does not take into account your investment needs or personal circumstances. It is not intended to be viewed as investment or financial advice. Should you require financial advice you should always speak to an Authorised Financial Adviser. Past performance is not a guarantee of future performance.