Newsflash: We are all guilty of making money mistakes sometimes.
Everyone has to deal with their money, and some of us do it better than others.
If you think you’re a master of handling your personal finances — or you’ve never given a thought to your level of expertise, take a look at the points below.
Your approach might not be as flawless as you think.
1. You don’t have a budget
A written budget can be the key to managing your money. A budget puts financial control back in your life. Otherwise, your money just goes, you lose control over your finances, and you set yourself up for overdrafts, overspending and debt.
Start keeping a record of your income and expenses. You can use an app like or . An Excel spreadsheet, or even a pen and paper, if that’s your style. Once you know how much you earn and how much you spend, some simple arithmetic will reveal how much you can afford to save, invest, or spend on gadgets.
2. You’re surprised by your bill each month
If you’re living paycheck-to-paycheck, what will you do if there’s an emergency cost like a hospital bill? How will you pay for your school or a weekend away?
There are two ways to increase your cash flow: Earn more money, or spend less. If you go the first route, take a look at tricks to negotiate a raise and ways to make extra cash while working full-time. If you’re aiming to spend less, consider reducing your largest costs, like your rent or transportation.
3. You’re always borrowing
If you never have enough cash to get through the month, it’s time to revamp your finances. Get to the root of the problem. Are you overspending? Are you living above your means? Do you have a budget?
If you have more bills than income, downsize and free up cash. But if you’re simply overspending, creating a budget and reducing how much you spend in certain areas can ensure enough cash flow.
4. You don’t know where your money goes
This is a top reason for overspending each month. It goes back to creating a monthly budget for yourself, a spending plan that guides your money.
You can decide how much to spend in different categories, such as transportation, food, entertainment. Balance your account on a regular basis to make sure you’re not overspending, and make adjustments to your spending plan as needed.
5. You and you partner have conflicts about money
If you’re a big spender, you and your partner might have frequent fights about money. This is especially true if your spending habits strain the household finances.
Rather than get defensive, listen and acknowledge your mistakes. Work with your partner to learn new money management skills. If you don’t resolve the issue, conflict may linger on.
What other signs reveal bad money management?
