How you spend your money impacts your credit score and the amount of debt you end up carrying. Being good with money is about more than just making ends meet. Don’t worry if you’re not a math whiz; great math skills aren’t really necessary – you just need to know basic addition and subtraction. If you’re struggling with money management issues such as living paycheck to paycheck despite making more than enough money, then here are some tips to improve your financial habits.

Make A Budget

Segregation is important as soon as you receive a paycheck or make profits. Divide your income into a ratio that works best for you. All it takes to get your spending on track is dedicating a few hours each month working on a budget. Instead of focusing on the process of creating a budget, focus on the value that budgeting will bring to your life.


Utilize The Budget

Refer to the budget you have made throughout the month to help guide your spending decisions. Update it as you pay bills and spend on other monthly expenses. At any given time during the month, you should have an idea of how much money you’re able to spend, considering any expenses you have left to pay. 


Limit Unbudgeted Spending

A critical part of your budget is the net income or the amount of money left after you subtract your expenses from your income. If you have any money left over, you can use it for fun and entertainment, but only up to a certain amount. You can’t go easy with this money, especially if it’s not a lot and it has to last the entire month. Before you make any big purchases, make sure it won’t interfere with anything else you have planned.


Track Your Expenses

Small purchases here and there add up quickly, and before you know it, you’ve overspent your budget. Start tracking your spending to discover places where you may be unknowingly overspending. Save your receipts and write your purchases in a spending journal, categorizing them so you can identify areas where you have a hard time keeping your spending in check.


Recurring Monthly Bills

Just because your income and credit qualify you for a certain loan, doesn’t mean you should take it. Many people naively think the bank wouldn’t approve them for a credit card or loan they can’t afford. The bank only knows your income, as you’ve reported, and the debt obligations included on your credit report, not any other obligations that could prevent you from making your payments on time. It’s up to you to decide whether a monthly payment is affordable based on your income and other monthly obligations.


Research Your Investments

Whether you invest in the stock market or gold or property, you must research and plan your investments. Insurance is another smart investment option. You must research different instruments available in the market for wealth management and insurance planning. 


Save For Big Purchases

The ability to delay gratification will go a long way in helping you be better with money. When you put off large purchases, rather than sacrificing more important essentials or putting the purchase on a credit card, you give yourself time to evaluate whether the purchase is necessary and more time to compare prices. By saving up rather than using credit, you avoid paying interest on the purchase.


There is a 70:20:10 rule which says that 70% of your income must be utilized for your living expenses, 20% should be your savings and 10% must be used to pay off any debts or loans you may have. The ones who do not require loans sometimes donate this percentage of income (for part philanthropy part tax concessions). We hope with the above strategies you are able to reach your goal income bracket soon.


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