Managing your own finances is something that’s easier said than done. You can be intelligent, cautious, and reasonably “financially literate,” but figuring out how to preserve your earnings and grow your savings requires a comprehensive strategic effort. Ultimately, it’s something that is best learned through experience and executed with input from professionals. But in a very general sense, here are a few helpful tips for personal financial management.
Find An App You Trust
This may sound a little bit simplistic, but there is no better tip for personal financial management than to keep track of income and expenses—and there’s probably no better way to do that than through a mobile app. Mint is the one that tends to get the most attention these days, but there are now numerous money management apps that can greatly assist you in understanding your own financial activity. Generally speaking, these apps link up with your bank account to recognize when and how you’re spending money and help you to budget accordingly. It’s a good idea for anyone concerned with personal finance to download a few of these apps and find one that works well.
Know Yourself (Before You Invest)
It may sound a little bit vague, but gaining a firm understanding of your own goals and tendencies is a very important component to financial management. An article about some of the top recognizable traits in successful investors described this concept as knowing your own trading personality. That means understanding what you are personally looking for if and when you invest your own money. Are you a day trader or a person who would prefer to have someone else looking over your money over the long term? Are you more risky or risk-averse? Answering these kinds of questions is a good way to figure out what might work best for you when it comes to putting away savings to grow over time.
Always Strive To Learn
This is a simple point, but one that can’t be reiterated enough. We once posted a piece about stock market investing tips in which we mentioned that education is the most important factor early in an investing career. And that advice can be expanded to include all personal financial management efforts. Reading tips, researching advice from professionals, and talking to others who manage their own finances can all help you to become more responsible and effective in your own efforts. The education should never stop, even if you’re doing a good job of maintaining a budget and growing your income.
Use Budgeting Tricks
Far too often, we think of the idea of creating a budget in broad terms. We imagine developing a clear picture of income and expenses and simply monitoring the difference to make sure we’re not spending more than we could (or should) be spending. That’s the general idea, of course, but many find that actually cutting back on expenses and maximizing income is easiest when the budget is addressed with specific goals in mind. For this reason, it’s always a good idea to come up with a few budget tricks to try. One article about strategic budgeting recommended the three-category budget, which basically means finding three budgeting categories where you can reasonably cut back on expenses. For instance, you might realize in your efforts to gain a more thorough picture of your own budget that you’re spending $150 a month at coffee shops, or that you’re pay
ing for a gym membership you don’t use. These kinds of discoveries make for possible categories for shifting how you use your money.
Recognize You Can’t Finish The Job
This goes hand-in-hand with the idea of constant education, but it’s worth mentioning as its own point: you don’t ever become a true expert at financial management. There’s almost always something you could be doing better, or at least something you need to be keeping a close eye on. This is just a reminder not to get complacent, even if you consider yourself a savvy personal financial manager!