Top 11 Money Management Tips and Tools – Easy and Effective Ways

Money management tips for every life stage are different, for example managing money as a bachelor vs doing it after marriage or after having kids is very different. We cannot use the same set of money management techniques for all these life stages.

Managing money is not just about paying off your bills on time, saving and spending wisely but it’s also about the right allocation and right usage of the money you have. 

You also need to take into consideration the possible emergencies, and also think about major life changing moments like marriage or having a kid.

Here are some of the best money management tips that can help you with budgeting your expenses better

Why should we manage our money?

It’s important to manage your money and protect your wealth so that it protects you when you are stuck in some medical or life emergency, it helps you lead a stress free life and manages your retirement.

You need to start managing money right from your first paycheck. Here’s why:

To become financially stress free:

Money or finances is something that can stress you out the most. Not being able to pay bills, spending a lot of money in the first 10-15 days of the month and having to be frugal for the last 10 days would give you stress. By managing your money better, you will be a lot more relaxed and stress free and you can then concentrate on other aspects of your life.

To maintain your lifestyle

Money management is important to maintain your lifestyle every time and everywhere. You can plan your outings, shopping, movies and house according to your lifestyle if you manage your money wisely.

To retire in peace

Retirement won’t suddenly feel like a burden or a downgrade to your lifestyle if you plan for it right in your 20s. This way you can have enough funds to manage and maintain your lifestyle in retirement years as well.

To grow your wealth

Money management is not just about paying bills on time and maintaining a lifestyle, it’s also growing your money. When it comes to growing your money you will have to look at various avenues like Mutual Funds, Fixed Deposits, Gold and so on.

You will have to look at money management from the lens of Save. Invest. Spend.

To help during emergencies

Money management and savings come in handy especially during emergencies. It is better to have provisioned for emergencies rather than being stumped when any kind of emergency arises.

Best Money Management Tips for you

Now that we know the importance of money management, here are some money management tips that can help you effectively manage your finances.

Set out a budget and stick to it

Budget is an essential step to start with money management this give you a bird eye’s view into what you earn monthly and what your expenses look like. Therefore, you can manage and plan your spending accordingly and prioritise better. Also, just making a budget won’t suffice. You have to follow it as well. Initially, don’t make a strict budget which is hard to follow, just make a simpler one and try to be within limits.

Even if you overspend a particular month, don’t give up! Try to follow it as much as possible and turn it into a habit.

Track your spendings

Once you have made the budget, make sure you track your spends every week and check where you need to cut back.

For example, you have spent a lot in the first two weeks of the month, you can consider cutting back in the last two weeks, this way you can balance it out.

Prioritize your spends

When it comes to your monthly spending, prioritize your essentials like rent, bills, grocery, etc. 

Your gadgets or expensive kicks can be lower on the priority list, this way you will always have a money cushion to fall back on in case of any emergencies.

Needs vs Wants

While prioritizing you should always give importance to needs and prioritize your wants. Needs are all the essential supplies that you need for a living, whereas wants are luxuries that you can also live without. Next time you ask yourself if you really need this or you can live without it. If it’s the latter, try to avoid the purchase.

Track your loans

Tracking your loans is the most important thing in money management, as these are the bills you cannot afford to miss.

The first thing that you should do after you get the salary is pay off the monthly debts that you have. Post that you can spend and invest. If you get any extra bonus or promotions you should prioritize paying off your debts.

Invest early

Investing early on in your life will grow your money much more than what it will if you start investing at a later stage. Aim to save at least 10% of your paycheck every month, and ensure you diversify enough so that you are secure from the market ups and downs. Try to invest in various assets like Fixed Deposits, Recurring Deposits, Gold, Mutual Funds and so on.

Trial and error as a beginner

When you start managing money it won’t be perfect in the first month itself and there is no right or wrong way to do it. Money management will be different for everyone based on the salary, goals, debts, lifestyle, etc. So remember you will take some time to understand and get it right. Don’t quit!

List down your goals and map out a way to achieve them

When we talk about money and savings we cannot miss our goals. We all have some goal to achieve like a Europe trip or buying a house or a car. In order to work towards it you need to manage your money better and put aside some money every month in the goal fund.

Make realistic plans

As we spoke about the goals in the last pointer, it is also important to understand that our goals need to be achievable, so that you don’t lose your confidence in the money management process.

P.S: Have long and short term goals.

Keep aside some money for emergencies

Very important aspect of money management is to save it for emergencies, because emergencies can never be planned. You will always need a fund for a medical emergency or a job loss. Ideally, you should have 6 months of salary saved for emergencies.

Save for retirement

Retirement planning is essentially because after working for 30-40 years, you are suddenly out of work and have a steady income stream. You have to plan your retirement according to you lifestyle. The planning should be as such that even if you don’t work you have a steady income flow coming in every month. This can be done through investments in Mutual Funds, Pension Funds, etc.

How do you manage money after starting your first job?

When you start your first job, it’s amazing because you have all this money which you can spend without being answerable to your parents or guardians. But right from your first paycheck you should develop a habit of saving and investing. This way you would be financially stable right from your first paycheck. You can also budget your money and try to be little cognizant with respect to your spending so that you can save better for your future.

Tools to help manage money

Managing money would sound like a huge task which it was a few years back, but now with the Jupiter Money app it’s easier to manage your money. 

Jupiter App will help you categorize your spends, manage your loans and other bills. The app will also monitor your savings and spending.

You can also invest in Fixed Deposits, Gold or Mutual Funds through Jupiter app. It’s super easy!

Other money management tools that you can use are: BudgetPulse, PearBudget, Automatic Savings, MyMoneyCircles and so on.

FAQs

How Savings Account can help to Manage Money better?

With a savings account it’s easier to understand your spending behavior and you can easily analyze and manage it.

How to manage money for my loan?

You should ideally set away the money required to pay off your EMIs (Equated Monthly Installments) every month.

How did you learn to manage money?

Managing money is something that you learn from your parents, friends, colleagues, but you should avoid replicating anyone else’s model. It’s not one size fits all.

How to manage money without any problems?

You can set out a monthly budget and try to follow it as much as possible. The key here is to be consistent and not give up.

How to manage money in your personal life?

You can manage your money by simply setting out portions of your salary for spends, savings and investing. This will help you manage your money better.

Is investing the best way to manage money?

Not exactly. Investing is just one part of managing money and not the way of managing money. Money management includes spending budgets, saving and investing.