Part of entering the “real world” is learning to manage your own finances. Money can be a drag. For something that is so essential to our lives, money certainly does cause an endless amount of stress. To stay on top of your finances and reduce the amount of stress that money causes you, follow these three
money management tips.
1. Automate Things: One of the best ways to save the money you make is by making it as painless as possible. Though it may sound trite, using automatic transfers each month to put some of your paycheck into savings can be one of the best ways to manage your accounts. All too often, we have our paychecks automatically put into our checking accounts and then we end up spending them. By scheduling an automatic transfer from your checking account to your savings account every two weeks or so, your savings will grow without you really realizing it. Furthermore, arrange to have your bills taken directly out of your checking account when they are due. This will make it easier to budget and you’ll never have to worry about forgetting to them. Building savings can be painful. Having to take a chunk of your paycheck each month and put it into savings can feel like you are losing money. Make things easier on yourself, by making this transfer effortless.
2. Know Your Credit Score: If you’ve attended college, bought a car, or owned a credit card, you have a credit score. Once you borrow money from a lender, that lender reports to the nation’s three credit bureaus and the bureaus calculate your credit score. This score is generated from your credit usage and payment history. With catchy jingles and numerous silly commercials, people hear about credit scores all the time, but rarely know the actual number attributed to their credit. This number is used to determine what loans you can get and at what interest rate you will get them. Needless to say, your credit score is important to managing your money. Many landlords check credit scores before renting to you. Also, some perspective employers may evaluate your credit score before offering you a job. Your credit score can be an indication of your level of responsibility. Review your credit report periodically to make sure that it has no mistakes. Keeping on top of your credit score will force you to better manage all of your finances.
3. Prepare a Will: Though this may sound morbid, preparing a will early is important. A huge part of managing your money successfully is being responsible with it. Part of financial responsibility includes managing your finances after you are gone. Hire a lawyer to craft a will, a durable power of attorney, and a living will. Though this may cost you a hefty sum up front, it may save those you leave behind thousands in taxes and fees. Furthermore, through the process of crafting a will you will have to gain a thorough understanding of your financial situation and take a look at your future financial prospects. Developing this plan and fully understanding your financial circumstances is essential to properly managing your money.
While money can be a difficult and even painful subject, it doesn’t have to be. Learning to carefully manage your money early is key to handling your finances without significant stress. Follow these three steps to gain strides on the path to financial security.
Mariana Ashley is a freelance writer who particularly enjoys writing about accredited online colleges. She loves receiving reader feedback, which can be directed to mariana.ashley031 @gmail.com.