Top Money Skills
There are things that people who are good with money do to keep their money. Some of these things come naturally, but most are learned skills which means that you can learn them too. Take a look at the top skills that money wise people have. If you do not have any of them, learn how to get them.
- Tracking Their Money
Those smart with money know where their money is coming from and where it is going. They have a budget and they stick to it.
If you do not currently track your money, it is time to start. Use the native spreadsheet program on your computer and pull up the budget template. Fill in the blanks with where you spend your money and you are well on your way to becoming a proficient money tracker.
- Paying Bills On Time
Managing money on time means paying your bills before they are due to avoid fees and/or penalties.
Are you bad about paying your bills on time, even when you have the money? You are not alone, but this is something that needs to change. Set aside one or two days a month and pay your bills all at once. Also, take advantage of all the bill paying tools at your disposal. Things like automatic payments, text reminders and email reminders.
- Investing Money Before Taxes
Those who know how to make their money grow do so before any taxes are taken out.
Be smart and invest in your company 401k or start an IRA. This will allow your money to grow faster since you put off paying taxes until later. You are limited i how much you can contribute annually to an IRA, so it is best to start as soon as possible.
- Spending Less Than They Make
Those who have money, spend less money than they make. They live a little bit below their means so that they have room to save.
If you are currently spending every penny that you make, you need to learn this skill. Take your take home income and immediately put 10 percent of it into savings. Then, take the rest of your money and divide it out among your bills. If there is not enough money, you need to make some cuts. Reduce your food budget, cancel the cable or even make a hard decision and find a cheaper place to live. You need to be living below your means.
- Contributing To Savings
Those who are well off got that way from saving their money. They save at least 10 percent of their take home money and often more than 20 percent.
If you are like most Americans you either do not have a savings account or you have a grossly underfunded one. You should open an emergency savings at an online bank and contribute at least 10 percent of your take home pay to it. Once you have 6 months worth of expenses in it, start saving money with a retirement investment account.
- Addressing Their Debt
To manage money properly, you must take a realistic look at your debt. Those who manage money right also know how much they owe and have a plan to deal with it.
The average household would need 20000 dollars to pay off their credit card debt. This is because most simply put their head in the sand and just pay the credit card bills when they come in. Do not be like this. Set up a spreadsheet or simply write all of your debts down on paper. You might be shocked by how much you owe. Find out your total and hen work on a plan to eliminate it.
- Putting Extra Money Into Savings
Managing money well means sending extra income into savings. If you get a raise, start saving more not sending more.
Most people see a raise as a way to start living better. A wiser choice is to take extra money and divert it into savings and investments. If you start making 600 dollars more a month, you need 600 dollars more to be put into savings. Resist lifestyle creep which happens when you spend extra money as you start earning it. It is easy to fall victim to, so pick an appropriate quality of living and stick with it.
- Reviewing Bills & Statements
Smart money people review all of their bills and do not just blindly assume they are right. Mistakes can be made and they like to catch the ones that negatively affect them.
If you blindly pay your bills without even looking at your statement, change this behavior. This is not to say that you must read every line, but at least review them for accuracy briefly and make sure that your rates and any previous payments are correct. If you are not careful, billing errors can cost you a few hundred dollars a year.
- Researching Their Purchases
Smart people fully research a purchase before they make it. They read reviews and make sure that the product or service they use is a quality one and they find the best price.
If you leap before you look, change this. Start taking a few minutes to research the things that you spend your money on. Make sure that they are a good value and that you get the best price. Do not be in a hurry, especially when making larger purchases.