9 Money Management Tips to Improve Your Finances

We all aim to live the best life we have always dreamt of, travelling, buying what we desire or having a big house without worrying about money or debts.

That’s why financial freedom is the best way of doing that, it’s about controlling what you have as your income to be able to live your best life even if you aren’t rich and without waiting for your retirement.

In this article you will find some financial freedom tips that helped people managing their finance:

1-UNDERSTAND WHERE YOU ARE AT THE MOMENT

To find a solution to any problem you have, starts with understanding the problem very well, that takes us to the first step of financial freedom which is knowing exactly where you are presently, which means you need to have a clear idea of the amount of debt you have, how much you spend every month, your income and your savings.

The best way of doing it is to list all kinds of debts you have, it might be student’s loans, mortgage, credit cards or even money you borrowed from family members or friends, all of that should be written down. After completing that task, do another list of your savings and the money you have.

Once you finish that step, we should move to the next one.

2-WRITE DOWN YOUR GOALS

A man who writes down his financial goals for the year.

The question you should ask yourself here is why do you need money?

Many people who adopted financial freedom claimed that once you have a goal in your mind that it keeps approaching, the dispersion makes you go forward and stick to the plan.

A goal might be starting a business in the future, traveling, getting rid of student’s loan or any personal goal that requires money. So go grab a notebook and write down the goals you want to achieve in the future, in the next 1 or 5 years as an example. Also, your goals should be reasonable and smart, that way you will be sure that you can afford it in the next following years.

3-TRACK YOUR SPENDING

A dashboard to track your spending

Tracking your spending is an important step to financial freedom, it helps organize yourself by knowing exactly how much you spend and on what you spend it, also how much money you saved up and the debt you still have.

There are many ways to track your spending, you can do it the old way, by writing down every detail or by using excel. People these days prefer using apps, they are easy to use and they do a perfect job at tracking your expenses. And you might also use some apps and set the goal there, that way you will have a clear idea when you will be able to achieve the goal depending on your spending.

4-PAY YOURSELF FIRST

Pay yourself first, it basically means that you should take some money from your income in put it in your savings or investment, by doing that you would be forced to pay your bills and expenses from the money you have left, in case it’s not enough for you, you can find other alternative like getting a part time job in order to get more money or reducing your expenses.

5-SPEND LESS

Spending less is about understanding or adopting a smart lifestyle, you can live the life you want by spending less money, like eating delicious food made at home instead of eating fast food that is expensive and not healthy, you will lose money and your health over time.

Spending less means saving more and paying your debts or getting a step closer to your goals, that’s how rich people got rich in the first place; they have that mindset of buying what necessary and not spend money on ridiculous things.

6-BUY EXPERIENCES NOT THINGS

A woman trying to create a passive income from the internet

We are talking about living the life you want without spending a lot of money, some people might find it ridiculous and unbelievable, but just take a moment and think of this, I’m sure you have at home things you once were dying to get , or you got because all people did but you are not using it anymore or it got upgraded to a new version and you are thinking of buying it, does it makes you happy on the long term? Nope it doesn’t, that’s why you should think of times when you felt happy and got good memories, it might be a day at beach, a dinner at home with friends or family or even a vacation where you could work and enjoy life instead of spending money on unnecessary items.

What we are saying here is that when you think wisely before buying things you don’t need and you are no longer influenced by people or advertisement, your financial life might get better.

7-PAY OFF DEBT

Having debt is people’s most common enemy, and it is difficult to outcome it, but you should be aware that getting rid of your debts is a massive step towards financial freedom, don’t listen to anyone who tells you otherwise, debts should be paid first and then you will see your money rise.

There are two methods of paying your debts, first one is snowball, where you start by paying off the smallest debt on your list and then go to the other. The second method is called the avalanche approach, where you start by paying off the big debt you have on your list and then move to the others. Both methods are good, it depends on you and which method you find efficient, one thing is sure is that paying off your debts is one of the best feelings ever and a huge step to achieving your goals.

8-CREATE ADDITIONAL SOURCES OF INCOME

Women, Money and Career

Sometimes our debts are way more than our salaries, and we keep thinking of ways to get more money to solve the problem, best way of doing that is to find another source of income, it might be planning more strategies to follow at work to get the business more successful or getting another job as a freelance, a uber driver or an online teacher for foreigners. It definitely takes time and effort but it pays off by giving you the money you need.

9-INVEST

Investing Your Money is the Best Way to Build Wealth

Investing is an important step to financial freedom, you may follow all the tips we mentioned before and get free from your debts, but once an emergency occurs you will find yourself suffering and in the same situation again, that’s why you need a plan to follow when you attain financial freedom.

Start with saving a small amount of money every month for emergencies or for your retirement, and increase it every year.

Following these financial freedom tips will definitely teach you how to organize your life, by spending money on necessary things and have good quality time like vacations and relaxation trips.

So it’s up to you whether you want to start now and get free or wait till your life gets messy.