Financial Literacy: How to Manage Your Money?

You need to treat your money judiciously, which will help you raise your own capital. But you not only need to be able to invest money correctly, but also allocate it for your needs, such as entertainment, for example, on betting apps in Ghana.

You don’t need to be a finance guru to adjust your financial life. In this article you will find simple tips that will help you survive in a volatile financial world.

What is Personal Finance Management?

This is income and expense planning in order to use your capital effectively. The management consists of the main points:

1. budgeting,
2. saving money,
3. repayment or reduction of debt,
4.  investing in your future.

If the idea of managing your money scares or strains you, do it gradually. Below I will give tips on money management that will help you gain control and, most importantly, calmness and confidence in the future.

Use these steps to create a plan that will work for your finances.

Start with a Budget

If you don’t know how to make a budget, start with a system that is close to you and that you can stick to.

For example, there is a 50/30/20 scheduling method. In it, divide the income by percentage:

• 50% goes to permanent needs (food, household chemicals, utilities, taxes, travel, etc.);
• 30% – on wishes (rest, trips, clothes, gifts);
• 20% – for savings and debt repayment.

If this method is unacceptable to you, there are many other ways to divide the budget. Download the free mobile app. Perhaps it will be more convenient for you to manage your money this way.

Track Your Expenses

By tracking expenses, you will understand where the money goes. It may inspire you to stop spending so much on some goods and services when you realize how much money is being wasted. Understand what you are aiming for and adjust your habits.

The goal is the main motivator to keep a budget, monitor expenses and restrain yourself when you want to spend your savings.

Find Ways to Save Money

By watching your income and expenses, you will begin to understand where you can save money. Start with yourself. Understand what prevents you from conducting a competent financial policy.

The next step is to adjust your daily habits. If you have a car, reconsider your daily route and driving style. Do you use a car where you can use public transport or walk? So you can save on fuel. If you have a habit of buying a glass of coffee every morning before work, think about whether it is more profitable to buy a thermocup and brew coffee yourself every morning. Reconsider your habits, especially harmful ones. What can or even should be abandoned?

Involve your family in saving, discuss family and personal expenses. Perhaps together you will be able to make long-term changes in the financial policy of the family. Over time, saving money will become part of the lifestyle. This does not lead to stinginess. Actions will become more conscious, and the money that comes with difficulty will stop flying into the pipe. There will be an opportunity to diversify your life.

Separate Budget Items

Don’t keep all your money in one basket. You need to divide the budget not only on paper or in your head, but physically. At the beginning of the month (or on the day of receipt of the main income), immediately break down the budget by articles. Keep the financial cushion and funds for accumulation separate from budget expenditures. This way there will be less temptation to take money from there in an emergency situation or succumbing to a spontaneous purchase.

Savings accounts in the bank will help here. The deposit must be opened with the possibility of replenishment. But the terms of withdrawal from the account depend on how you can control yourself. There are savings accounts with the right to withdraw funds at any time, and there are those where your funds will be unavailable for a certain period, which you yourself will determine when opening an account. If you are saving for an apartment, vacation, a new car or just a purse, hide these funds on a separate deposit. This way you will be able to see the progress in achieving the goal.

Make a Payment Plan in Excess of the Debt

You know exactly your monthly loan payment at the bank. If you borrowed money from a friend or relative, discuss what parts and when you will repay the debt.

Knowing your monthly payment, try to repay a little more. This way you will close the loan ahead of time and overpay less. If you have several loans, first deal with the most expensive debt — with the highest interest rate. Pay it off first of all by making minimum payments on the remaining loans.

The minimum payment does not mean that you can not pay extra for the rest of the loans. Do not allow penalties and fines to appear. After paying off one debt, take up the second and so on. Develop healthy credit habits. Your credit rating determines the banks’ trust in you as a debtor and the credit rates that the bank will want to offer you.

Make the Most of Your Savings

Money management is not limited to teaching yourself to spend less than you earn. A sure sign of financial skill is the ability to save enough to live comfortably in the long term, as well as in the near future.