6 Awesome Money Management Tips

July 10, 2018 (Investorideas.com Newswire) We all know that as the economy changes, it can be challenging to keep up with all your financial responsibilities. Fortunately, there are a number of things you can do to make it easier to manage money no matter what the economy does. Let's examine six essential tips on budgeting and money management that will prove to be very beneficial to you and your portfolio.

Operate On a Budget

A budget is an essential component of good financial management. Without a budget, you can find yourself spending money on without realizing what you're spending money on. Your basic monthly budget should factor in all your income sources and all the expenses you have to pay each month. With a plan in place, you can keep your spending under control and make all your monthly payments on time.

Educate Yourself on Investing

Investing choices can essentially make or break your finances, especially if you're not aware of what you're investing in. Working with a financial advisor to generate an investment policy statement can ensure you make the best investment choices possible. While investing certainly comes with risks, getting educated will help minimize the risk as much as possible.

Build Credit

If you need a boost to your FICO Score, you need to show that you can responsibly handle credit obligations. Using a credit card each month (provided that you pay it back on time) will help build your credit score. You don't have to max out your credit card, and actually, you shouldn't. Instead, you should use it for small monthly purchases that you pay in full. Each month you make a timely payment will boost your credit score.

Plan for Annual Expenses

It's pretty seamless to manage monthly expenses. Having said that, expenses that come only once a year that completely blindside you can wreck your budget for that month. You'll want to plan for these expenses by saving up for them all year long. Divide the total amount of the expense by 12 to see how much you should set aside each month for that expense. Then, set this aside money in a separate checking account so you'll have it when it's time to pay that expense.

Always Be Saving

As you know, there are always opportunities to save money. The key is finding those opportunities. Take time to review your spending twice a year to identify places where you can cut back. To your delight, you may be able to completely eliminate some expenses. Or, you can shop around and find a lower price for the same item. Pursuing a new habit, such as couponing, can also help you save more money.

Diversify Your Investments

Putting all your money in the same investment can be a risky move. If that investment drops, you risk losing everything. Erik Gordon, CEO of ErGo Ventures LLC, a private equity and venture capital investment company, encourages you to consider investing in a mutual fund to spread your risk and allow you to invest in multiple securities without having to do a ton of research. You should also look at no-load mutual funds which will allow you to avoid many of the fees that make investing more expensive.

Author

Jeremy Biberdorf
modestmoney.com

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