While it isn’t the most common reason for someone to fall into financial insolvency and Texas bankruptcy simply due to overspending, the truth is we could all use a little help becoming better money managers. Whether you are making minimum wage or the CEO of a major company, here are a few things you should be thinking about when it comes to managing your money:
Budget better — Less than one-third of Americans report having a outlined budget. Knowing where your money needs to be, as well as where it goes by tracking your spending, can help keep you on track. Develop a list of all of your expenses and set aside a budget for variable items like medical costs, clothing, and entertainment. Keep up with your receipts and be sure you don’t overspend in any one category each month.
Save smarter — What is worse than not having a budget is not having a plan for your savings, or any savings at all. It is important to have an emergency fund for covering essential living expenses in the event of job loss. But you should also have a separate savings for things like down payments on a house or car. Take advantage of some banking tools and have your savings automatically drafted from your savings each month.
Pay properly — Most people make minimum payments on their monthly debt accounts. While this strategy will keep you out of default, it certainly won’t get you out of debt any time soon. Budget for paying minimum plus an additional amount each month. Try shooting for minimum monthly payment plus 5-10% more each month. Not only will this get you out of debt faster, but it will save you thousands in interest payments in the long run.