Money is a double-edged sword. If you manage money wisely, it has the power to kill your enemies (means your problems) and if mishandled, it can kill you too.
Life becomes a joy ride when you have good financial and money management skills.
The good news is that like other skills, you can unlearn old and outdated managing money practices and learn new and fresh strategies by practicing them continuously.
Despite earning a handsome amount of money, if you are still having trouble and want to learn how to manage your money wisely, here are some suggestions to help you improve your financial habits.
PART 1. BEST TIPS FOR PAYMENTS & EXPENSES
1. Beware of Recurring Charges
Keep a close eye on your expenses. This is a key factor to manage money wisely.
Many of my friends have subscriptions to services that they never use but the amount is continuously deducted from their bank accounts.
People often forget about monthly subscriptions to online games, movies, software, and mobile apps and the companies continue to charge fees to bank accounts.
If you want to manage money wisely, it is worth reviewing every dollar spent.
2. Find Legal Loopholes To Reduce Your Taxes
Aren’t you fed up with the exorbitant amount of taxes you have to pay to the IRS?
Income tax, sales tax, real estate tax, payroll tax, personal property taxes, excise tax, gift tax – the list seems never ending.
The IRS has been given approval to lawfully “steal” your money on an annual basis.
The only LEGAL way to beat the system is to take advantage of the many “legal loopholes” that are there, and wealthy people and their large corporations have been benefiting for decades. But the middle and lower middle classes doesn’t have the slightest clue about these legal exemptions.
Former tax professional Wayne M. Davies has explained these legal tax saving loopholes in his book to assist the common man. He guarantees that you will save at least $2,000 if you follow his advice.
3. Keep Track of Your Spending
Managing money is easy when you record your monthly expenses on regular basis. It is an important habit you should practice.
Although it is difficult for many to remember where their money goes each month, tracking it can help identify ways to save money that could be used to support a worthy cause.
Keep track of how much money you spend each month. Start by tracking your spending for only one or two months. Then, the next phase comes and that is to identify the unnecessary expenses you are habitual making and control them.
4. Create A Payment Calendar
I once visited John, one of my school friends, and immediately noticed a large wall calendar where all his billing due dates, annual payments, major expenses, and billing cycles are noted.
You can also create such a payment calendar and hang it in a prominent place in the house.
It will be easier to pay on time, even if you don’t have a paper bill. This will allow you to make a more detailed budget without having to pay excessive penalties or fees – a piece of good advice to manage money wisely.
5. Set Aside for Annual Payments
To avoid becoming overwhelmed by unexpected expenses, set aside some money from each paycheck.
Divide your annual expenses by the number you get in paychecks each year. You’ll be prepared for the next expense when it comes due.
6. Do Research
Before you make a big purchase, do some research online.
You can also check the website of the local store for special coupons and other offers, even if you are planning to purchase the item in-store.
If you are a current customer, make sure to check your email for sales announcements and coupons. These money management tips help you a lot in controlling your expenses.
7. Filing & Record Keeping
Establish a system for good record keeping for managing finances.
You will be able to easily prepare your balance sheet by storing every bill, receipt, and voucher in the right place.
Poor filing and mental notes can lead to confusion and stress.
8. Hire An Accountant
If you have multiple investment portfolios, it’s better to hire an accountant. He will do the work professionally, saving much of your time and effort.
To manage money wisely, remember not to pay an accountant more than he’s worth.
Are his fees reasonable compared to the value of his advice?
How much does he charge as compared to other accountants of the same area?
Before you pay hefty fees, verify his credentials.
Is it possible for someone else from the family to do the same job (maybe your son or cousin studying accounts or finance can help you)?
PART 2. BOOST YOUR SAVINGS TO MANAGE MONEY WISELY
9. Follow The 50/30/20 Rule
How to manage money wisely?
The 50 – 30 – 20 rule is a simple and famous answer to that question. The general rule is to divide your monthly after-tax income into three categories:
50% for needs, 30% for wants, and 20% for savings or debt repayment.
It is tested and proven that your money works more efficiently when you keep your expenses balanced across these major categories on a regular basis.
The rule is simple to follow as you just have to track only three major categories, instead of worrying over each and every dollar and stressing yourself about the details of every item.
10. Emergency Fund
You should have an emergency fund to cover unexpected financial events such as car repairs and medical bills.
It is important to develop a habit of saving money for emergencies. This simple habit will help you avoid financial problems.
Even if your income is low and you have a tight budget, you should invest at least 3% to 5% of your monthly income into an emergency fund.
Moreover, instead of depositing this money in a bank account (where you get pennies in return), you should consider can investing the amount in stocks, certificates of deposit or Bitcoin to further build your emergency fund.
11. Use Extra Stuff to Manage Money Wisely
Don’t throw away the items you don’t need anymore.
Holding a garage sale is a good idea to earn extra cash and helps in managing money.
To find out how much it is worth, look online or in local newspapers for “for sale” ads. Then advertise it for sale.
If you have paid money for your items, don’t let them go free in any case.
12. Automatic Transfer to Savings Account
To save money, set up automatic transfers to your savings account at each pay period. These automatic transfers help you get comfortable with the idea of saving.
This prevents you from spending too much before your money is saved.
Automate your savings today to avoid missing out on what you don’t see.
13. Creative Ways of Saving
Think out of the box solution to answer how to save money.
There are hundreds of ways you need to explore and start practicing to increase your savings.
Buy in bulk for a discount, use coupons to save money, buy in advance, and look for bargains at garage sales or auctions.
You can switch from the premium cable TV package and move to the basic channels.
To get a reduced utility bill, combine your power, phone, and water services.
Instead of paying monthly bills, pay yearly payments to earn 10% to 15% savings,
Your hobbies can help you make money. It’s a great time to discover your creative side and make money from it. Part-time teaching or imparting work skills to others is a good idea.
Volunteer for social services. This could help you find a job or a new career.
Learn how to mow your lawn and maintain your heating and plumbing systems.
These are just some creative ways of savings. Think of others to manage money wisely.
PART 3. BEST TIPS FOR INVESTMENT
14. Follow Experienced Forex Trader
Majority of people miss the simple point and lose their investment.
The easy way to get success in Forex trading is to follow an experienced Forex trader and get your trading back on track.
For example, Bob James has over 10 years experience trading the markets and you can tap into this wealth of knowledge by following his Forex trades. He also offer services where you can join him.
His service is rated 5 star on Investing.com, so you can follow every signal with confidence.
15. Invest Small
Even if your financial resources and budget are limited, do make investments, no matter how small they seem. These small investments can help you make more income.
Find out if your employer offers to match for 401(k). It basically gives you free money.
It might be worth looking into opening an investment or retirement account.
16. Invest Wisely
One of the best money managment tips of Warren Buffett is that do not to invest in anything you do not understand.
Ask an accountant for details about the investment.
Don’t trust your gut instinct and don’t invest in it if it doesn’t make sense.
17. Never Put All Eggs in One Basket
Another important tip to manage money wisely is: Do not invest all of your money in company shares.
It’s like trying to put all your eggs in one basket.
Your savings will go to waste if the market crashes or your business goes under.
This investment should not exceed 10 percent of your total portfolio.
18. Do not Invest in Companies Promising The Moon
Greed is the basic human instinct and we humans get trapped easily through it.
Instead of believing blindly in the companies promising high returns, prefer funds that performed well in the last year and offer reasonable returns comparable with similar packages.
19. Avoid Ponzi & Pyramid Schemes to Manage Money Wisely
Avoid illegal money-management schemes.
Millions of hard-earned dollars of honest workers are lost each year, who trust dubious organizations to manage their money. It is better to be aware of such scams in advance.
The evil practice was started by (and named after) Charles Ponzi of Boston, Massachusetts, in 1920 who guaranteed a 50% return on investments.
While there is nothing wrong with offering such high returns, the fraudulent practice is that companies never invest the capital they raise, instead, they pay returns from the deposits of new investors.
Eventually, a point comes when new investments are not generated and the whole system collapses.
It is illegal to profit from Ponzi schemes and you could be held responsible for any recovery or penal action.
Remember the famous saying of Mark Twain “It’s easier to fool people than to convince them that they have been fooled.”
This is another deceptive business model where a company promises to multiply its returns if you register more investors to the system.
Initially, the membership pool grows exponentially, but gradually recruiting new investors becomes impossible and the “business” fades away quickly.
This results in the loss of money for all investors who join at a later level.
MLM (multi-level marketing), binary marketing, networking business, and chain referral schemes are other fancy names for pyramid schemes.
How to Check These Scams?
Following are some tips to invest cautiously and manage your money wisely.
Ask for a copy of the company’s audited financial statements for the past few years.
Verify that your company is registered with the appropriate monitoring body or national registrar of corporations.
Verify that the scheme is licensed by the company investing in it.
If a company has all the necessary certifications, it will have insurance to cover any losses.
Avoid any company promising disproportionately high returns in a short period of time.
To get the best advice, consult an accountant, lawyer, and local financial authority.
PART 4. RAISE YOUR INCOME TO MANAGE MONEY WISELY
20. Find Side Hustles That Are Easy
Instead of just focusing on reducing expenses, a better money management strategy is to find ways to increase your earnings.
Side hustles are the minor jobs that you can do on the side to earn some extra money. For instance, you can help neighbors mow their lawns.
Other easy side hustles are:
- Become a tutor
- Dog walking
- Sharing your room through Airbnb
- Offer landscaping services
- Do grocery for elderly people in the neighbor
Select any one of these side hustles that suits your personality and set of skills. Along with your day job, any of these side hustles help you manage money wisely.
21. Start Working Online
With the internet revolution, a number of new opportunities surface up that are legit and easy. What’s more amazing is that you don’t have to step out of your home or do some manual tasks. You earn some extra cash while laying on your couch.
Some of the famous ones are:
- Affiliate marketing
- Graphic design
- Article writing
- Paid surveys
- Test websites
- Sell your photos
- Amazon Mecanical Turk
- Be a virtual assistant
- Video creation
- Video editing
- Social media manager
Want some more options? Read this post: 13 Easy Ways to Earn Money Online Instantly
Select ONLY ONE of the above side hustles and focus on it. Obviously, you’ll select the one with that you have some experience and knowledge.
Don’t hop from one hustle to another every week. This will generate no results.
In my opinion (and I’ve 7 years experience working online), affiliate marketing is the easiest and quickest way to start earning online. But most of the people get confused how to do affiliate marketing.
So, I designed 15-Day Email Series where I explain everything step by step. Join it now to avoid confusion, trial and error and headache!
22. Write an eBook to Manage Money Wisely
Don’t consider writing an ebook as something impossible.
Just identify an area of your life where you have knowledge, expertise, or experience. Below are some ideas you can brainstorm on.
The subject you like in college (Biology or Maths, History)
Your passion or interest (traveling, piano, guitars, painting, music, etc.)
Sports you are passionate about (basketball or boxing, golf, soccer, boxing)
Your skills at work – public speaking, advertising, running ads for Facebook, and Youtube.
After identifying an area of your interest, identify the most common problem people face in that field. Then, do some research and write 30 to 50 pages presenting a solution to the problem.
Convert your document into PDF format and using platforms like Gumroad or Shopify sell your ebook. This is one of the easiest ways to earn online and to manage money wisely.
23. Sell Your Crafts And Arts Online
Etsy is a great online platform to sell your handmade crafts like embroidery or even stickers.
The site, which specialized in arts, crafts and vintage items, generated revenues worth 2.3 billion U.S. dollars in 2021, as compared to $1.7 billion dollars in 2020, a rise of 35% from the previous year (Source: Statista)
Unlike Shopify, Etsy is free to join, plus you can start your shop here and list items you want to sell without any cost.
There are endless options to sell on Etsy. Buyers search for the products and purchase directly from sellers and Etsy charges a fee for facilitating the sale.
Etsy is an amazing side hustle to raise income and manage money wisely.
24. Start Your Own (Real) Online Business
All big ventures start with an idea, and then with the dedication and commitment of founders, turn into giants.
KFC, Amazon, Uber, AirBnB, Ali Baba, and even Google and Facebook are well-known examples.
So, if you are that kind of creative person and have an idea that helps people to solve their problems and facilitate them to live a happy and joyful life, then you hit the bull’s eye.
Starting your own (real) business today was never so easier in the history of mankind. For the first time, the internet demolishes all major business hurdles that hold back common people to start a business.
Build a website for your company and you are good to go. No huge capital is required. No need to set up an office. No heavy salary is to be paid to staff (use Upwork or Fiverr). No warehouse costs are there and so on and so forth.
The ONLY thing you need is a mentor who holds your hand and guides you step by step on how to set up an online business.
Dave Sharpe is one such mentor you should follow. In the last 8 years, he’s trained over 300,000 online marketing students worldwide and Forbes quoted him as “one of the masterminds of this industry”.
He has put together the “15-Day Online Business Challenge” – the most affordable program for anyone who wants to learn the exact steps he’d used to build a thriving online business starting from scratch
PART 5. BEST TIPS TO DEAL WITH BANKS
25. Get Free Checking Account
Register for a free checking account.
Checking accounts are now charged an average of $13.00 per month and require a minimum balance in order to be free.
You can switch to a no-fee account, which does not require a minimum balance and doesn’t charge per transaction.
Consider smaller banks, credit unions, or online-only banks in your area.
26. Avoid Taking Loans to Manage Money Wisely
Avoiding debt is the best financial decision to manage money wisely.
Do not take out long-term loans. A 40-year mortgage or a 7-year auto loan will have high-interest rates. The asset’s value will drop to zero in that period.
While a loan can be used to purchase cars or homes, credit cards are not the best way to get by.
27. Set Automated Payments
Set as many bills as you can for automatic payment. This will save you time and money. Although you still need to review your monthly activities, it will be much quicker to check your bank account online than to review your checkbook or check your bills.
Setting automatic payments helps you manage money wisely.
28. Credit Card – Your Financial Enemy
Credit cards are your worst financial enemy. They are nightmares if you are a bad spender.
Our consumerism society pushes everyone to “shop till drop”. But be careful as the mantra is crafted for the profits of companies and manufacturers, and not for the persons trying to manage money wisely for living prosperous lives.
The whole system is designed to distract you from money management. You pay with your card when you actually don’t have the cash. A bad decision.
Do not allow yourself the temptation to spend your credit card on items you do not need.
29. Keep One Credit Card
Do not apply for more than one credit card.
To avoid paying unnecessary fines, make sure you pay off that one card before the end of the current date.
Beware of impulsive buying as this can ruin your finances and efforts to manage money wisely.
You must ensure that your credit card bills are paid on time. A chronic debt trap can be a serious problem for money management.
Hidden charges and fines will be assessed for delays and can eat up your savings.
Related Post: 15 Fiverr Gigs to Earn Money That Requires No Skills
PART 6. PERSONAL HABITS TO MANAGE MONEY WISELY
30. Practice Self-Control
Impulsive buying is the single most common factor that destroys all planning and budgeting of the majority of people.
So, you should try to practice self-control and don’t get into the trap of emotions.
Try to be a rational and logical person and don’t let stress or greed dictate your actions.
Take your time before making a decision. If you aren’t sure, you shouldn’t do it.
If you learn the importance of self-control from this post and start practicing it, you’ll get the true message to manage money wisely.
31. Set Your Priorities
An important way to combat emotions and practice self-control is to set goals and priorities at the start of the month.
This will help you curb impulse buying and you’ll be able to manage money wisely.
Your priorities should be reflected in your financial goals. Clear goals will reduce the likelihood of you spending on things that don’t help you get closer to your goal.
32. Set Time to Manage Money Wisely
Fix a time in your daily schedule to keep track of your finances.
It is not enough to just add up the numbers in your head. You need to keep track of your monthly expenses by carefully reviewing all receipts.
If something isn’t working out, you need to be aware.
33. First Things First
Budget for your needs and save money.
Take care of your net income (the amount left after all expenses are paid). This net amount is not all available for partying or having fun.
From your net income, deduct annual payments and emergency funds first.
Then use a small portion of the amount for fun, traveling, or for the product you desire (a new mobile), if you want to manage money wisely and keep your finances in order.
To ensure you are on top of your bills and have enough savings to cover any emergency situations, this should be done each week.
This is a new start for you. You can be debt-free and have money saved.
Keep on trying to manage money wisely.
34. Manage Money Wisely With Family Meetings
Involve your family and consulting with them about the financial situation is a good strategy to manage money wisely.
Children’s responses change dramatically when you involve them in the decision-making process and they become more cooperative.
Also, let them know if you or your spouse require additional funds to cover unforeseen expenses.
Train children to be careful while shopping.
Express your disapproval of impulsive or wasteful buying.
Instead of taking a vacation paid for, you can organize a cleanup in your community and host a picnic.
To get low-cost deals, organize garage sales or auctions.
Encourage everyone to think of new ways to boost saving and manage money wisely.
35. Take Courses to Manage Money Wisely
Keep your financial knowledge updated and continue learning new techniques and strategies.
Nowadays, the online world makes the task easier than ever.
Take courses from Udemy, buy personal finances books from Amazon, join forums, and actively participate in Facebook groups.
Final Words – Manage Money Wisely
Changing your own habits is the basic step toward better finances.
Some habits prove more difficult to change than others, but if you stick with the plan, you’ll end up with great money management skills.
The above mentioned money management tips help you manage money wisely and will serve you for the rest of your life.
No one is born with the skills of managing money, and everyone has to learn and practice them for a smooth and peaceful life. You need to learn how to incorporate these money management tips into your daily routine.
Use the information provided in this article to help you improve your financial situation. This article will give you the tools you need to solve your financial problems and improve your financial position.
Each dollar saved is actually a dollar earned.
If you follow and apply the above steps, you’ll be stress-free and sleep peacefully and others will come to consult you on how to manage money wisely.
Thank you for reading till the end.
Disclosure Note: The post has affiliate links. But don’t get me wrong when I mention this.
It doesn’t mean that I write posts to earn an affiliate commission.
The truth is the other way round. I research for hours writing these posts and in the process, I find some services and products that I genuinely consider would be helpful for readers. I honestly recommend them (through affiliate links) so you get results fast.