The new year is almost here, and for many people, that means it’s time to change, evolve and improve. While some people use the new year as an excuse to get motivated with losing weight or changing bad habits, all of us could probably do with making a resolution to manage our money better. Learning how to properly manage your money in 2020 will make it easier for you to achieve your long-term and short-term financial goals. The more of a change you make, the easier it will be to put the deposit on the home of your dreams or buy the car you’ve always wanted. So, how do you get started?
Create a Budget
Budgeting is at the heart of successful money management. While a lot of people look as budgets as restrictive to their everyday life, the truth is that your budget simply shows you what you can afford to spend, based on what you earn. A budget can be as simple or as complex as you need it to be. To begin with, all you need to do is figure out how much you have coming into your household every month, and how much you have coming out. You could also look at creating a bare-bones budget, where you find out how much money you need to pay for the absolute essentials like food and housing, and nothing else. This will give you an insight into how much discretionary spending you can do.
Deal with the Loan Situation
While many people assume that the best way to avoid debt is to stay away from loans entirely, that’s a lot easier said than done. The truth is that most people will need to take out a loan at some point during their lives. You might need a loan so you can pay for a new kitchen in your home for instance, or so that you can pay for your education. Student loans are some of the most common lending options in the world. All you need to do to make sure that you’re making the most out of your loans, is ensure that you’re not paying over-the-odds for them. Check the market and figure out when to refinance your loans for packages that give you lower interest rates and better deals.
Track your Spending
Finally, once you’ve made a few basic changes to the way that you spend your money, by refinancing your loans and cutting costs wherever you can, you can begin to track how well your budget actually works. Tracking your spending will make it easier to figure out where you’re most likely to have problems with your cash. For instance, you might notice that you overspend frequently when you go food shopping. If that’s the case, then you could try writing grocery lists to take with you every time you go to the store to ensure that you don’t buy anything you don’t need. Don’t be afraid to sit down and work through your budget each month too, to figure out if anything needs to be adjusted or changed.