A Few Tips on Money Management

Determine Your Needs

The first step in managing your money is to determine your necessities, including basics such as rent or a mortgage, utility bills, car payments, insurance, taxes and food. Write down how much each of these things costs each month. (If something like your insurance is billed only once or twice a year, divide that cost by 12 so that you know how much to save for it each month.) Add up your total costs to determine how much money you need each month to survive. This does not include any luxuries.

Your Monthly Income

Look at your paychecks and see how much you take home each month--after deductions for such things as taxes, insurance, pension plans. Subtract the total of your necessities from the amount you bring home each month. The balance should be divided into two categories: savings and luxuries.

Savings

You should aim to save at least 10 percent of your monthly income. The easiest way to do this is to have it automatically deposited from your paycheck into a savings plan. Some employers will allow you only one account for a direct deposit, but you can set up an automatic transfer from your checking account to your savings account each month.

Luxury Items

After you've paid for your necessities and contributed to your savings account, you should prioritize your luxury items. Do you want some new clothes or to go to a movie or maybe go out to dinner? You have only a limited amount of money that you can spend on extras, so plan out what you want to spend it on each month. If you want something that's more expensive than your allowance for the month, save a portion of your monthly allowance until you have enough for your purchase.

Credit Cards

Use credit cards with great care. If you're not careful, you can blow your budget because you're not paying attention to how much you spend each month. Avoid using credit cards when possible to maintain the most control over your budget, but when you do use them, pay them off in full each month to avoid interest charges.. Make a list before you go shopping and stick with it. Unless you truly forgot to write down an item that you need, don't buy it.

Note: Managing money can be challenging. It's important to live within your means, and there are some simple things i can do to help you do that. Creating a budget is a good start, but there are other things you should do to manage your money properly.

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