Money Management Tips (What You Want To Know Wednesdays)

Our friends at Learnvest.com featured an informative and helpful article about budgeting. This article features a 4 week challenge that will help you manage your money better and efficiently. Meeting a money goal can be one of the hardest goals for us to achieve but these tips can help you make meeting your goal a simple life change and easier to stick with.

  1. Week 1: Save by Starting Small – Little expenses can add up. If you spent 5 dollars on lunch every day during the work week, you will easily be spending $20 a week, which adds up to $100 dollars a month. Or even your morning cup of Starbucks.   Starbucks drinks can easily add up to be a costly expense.   Try bringing your lunch daily, or making your own coffee at home. If you find that it is just too difficult to not have Starbucks, or to eat out, that’s okay, try another cost saving cut out for the week. As an added bonus keep track of your weekly savings and tally them up at the end of the month and transfer that amount to a savings account.
  2. Week 2: Put Away the Plastic – Use cash for your non essential purchases. It’s easier to keep yourself accountable for your spending when you’re seeing the actual cash leave your hands.   Start by calculating the amount of spending cash you have for the week. You can do so by subtracting your fixed costs and financial goal contributions from your monthly take home pay. Once you have that number, divide it by 4.3 to adjust for the number of weeks in an average month.  
  3. Week 3: Dip Your Toes into Investing – Before you get anxious about the stock market – don’t worry, you won’t be investing money in real life – you’ll just be creating a mock investment portfolio. This challenge can help you gain experience without the risk of losing money. Choose stocks or funds you would theoretically like to buy, and then keep track of how they do for the next few months. During this challenge you can pretend to buy more shares, or sell shares to get a feel for how the stock market works.
  4. Week 4: Schedule a Check-in on Your Net Worth – It’s time to take a look at the big picture. Figure out your net worth by subtracting your liabilities from your assets. Assets include savings accounts, real estate, cars, etc. Liabilities are money you owe. The resulting number is your net worth. Don’t be alarmed if this number is smaller than you were anticipating, or even negative. This information helps you create a plan to grow that number to what you want it to be.

To view the original article on Learnvest.com, click here.


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