It doesn’t take a genius to crack the code of money handling.
We learn many valuable lessons when we’re on the cusp of adulthood, such as sustaining a healthy relationship, pursuing a lucrative career, starting a promising enterprise, and handling personal finances.
However, for the young generation, managing funds is not always an easy undertaking. With tempting online sales, after-work nightcaps, and yearly releases of the iPhone, it’s quite difficult to properly handle the flow of expenses and save up money.
So, how can a working millennial like you make smart financial decisions? You’re in luck because we rounded up five sure-fire ways to manage your personal cash flow like an absolute pro.
Map It Out
Consider your budget plan as your financial road map. This gives you an actual picture of your spending habits and your financial targets.
First, determine your net income or final take-home pay as a full-time or part-time employee. Next, identify your fixed expenses or your monthly financial obligations. These include rent payment, utility bills, car dues, and insurance premiums. Then, list down all your variable expenses, which include food, groceries, travel, and other miscellaneous expenditures.
After identifying your projected expenses, you can now set short-term and long-term goals for yourself. From paying your auto loan in full to ordering a complete drum set, from purchasing gravestones for your beloved to buying hefty real estate, you must set a target for yourself. This gives you a sense of direction when it comes to managing your money.
Having a general blueprint allows you to make more guided decisions as a young adult. More so, a budget plan allows you to determine your priorities in a more financial sense.
Aside from that, you can also determine money leaks in your spending habits. If you see you’re forking out more than what you’re raking in, then you can make corrections.
Beware of the Small Things
Sometimes, it’s the minor expenses, not the major purchases, that derail us from the land of financial prosperity.
How often do you go for a coffee fix or get your hair done in a single week? These small purchases look harmless at first, but before you know it, you’re already sucked out dry just four days after your payday.
So, it’s important to track the money that flies out your front pocket. In fact, there are numerous apps and software that can assist you in monitoring and assessing your cash flow. But the secret is to always be aware of the expenses you incur every day and avoid spending beyond your means.
Slow Down on Splurges
Do you really need hair extensions, an iPad, and a new pair of shoes all at once? Or are you being impulsive? We’ve all been there. But why do we easily fall into the trap of blowing our hard-earned money?
According to studies, constantly curbing our desires to buy things actually reduces our self-control. Frequent use of willpower tires out the brain and leads to poor financial choices. But that doesn’t mean we should give in to temptation.
The internet is an awfully enticing place for impulsive buyers. It’s so easy to skim through catalogs and just fill your online cart to the brim. But how do you fight the urge to hit that checkout button?
Well, you can avoid making the mistake of maxing out your credit card by giving yourself time to think: Am I buying this out of necessity or out of sheer impulse? Wait at least a week or two, then decide whether to buy it or not. If you’re trying to be financially literate, being an emotional buyer won’t do the trick.
Indeed, your ability to manage finances boils down to your level of self-control. If you have the willpower to turn your back on an unnecessary splurge, then handling your money will become an easier task.
If Possible, Do It Yourself
Instead of running to the salon to get your hair dyed or swinging by a coffee shop for a caramel macchiato, you can actually just do it yourself.
You’ll save a lot of money from skipping expensive and unnecessary purchases and just making do with what you have.
Meal planning, for example, is a practical way to reduce the money you spend eating at greasy diners and quaint coffee shops. You can also turn your home into a spa salon by crafting homemade face masks and body scrubs out of ingredients you can find in your kitchen such as ground coffee, brown sugar, and oatmeal. Because the truth is, part of being a financial whiz is being creative and resourceful.
Live a life anchored on the principle, “quality over quantity.”
When purchasing clothes, furniture, gadgets, and certain commodities, look at their durability, usability, and practicality. Repairs and replacements can eat up a great chunk of your budget, so steer clear of excruciatingly substandard items. Choose high-quality and long-lasting items because they will save you heaps and heaps of money.
To put it simply, if you want to get the most out of any bargain, buy products and services where you get your money’s worth.
Being a financial whiz isn’t purely intuition. The art of money management is practically rooted in discipline and self-control. And by applying these helpful techniques in your life, you will master the art of money handling in no time.