What is money management?
Money management covers everything to do with financial self-care. It’s being intentional about what goes in and out of your bank accounts and making your money work for you and your unique set of circumstances.
Exactly what is money management for you will look different to somebody else. For me, it covers all of the following:
- Creating and sticking to a budget
- Having an emergency fund to protect you in a crisis
- Investing so your money makes money for you
- Paying off debt in a timely manner (or avoiding debt altogether)
- Being aware of any tax breaks you can utilize or living in a tax-friendly country
- Increasing your wealth through upskilling, side hustles, pay raises, bonuses, or entrepreneurship
- Setting up direct debits so you never forget an important payment
- Putting money into a pension to take care of your future self
Develop money management skills
Anybody can learn money management skills and get a better grip on their finances. If you didn’t grow up learning strong money management skills do not despair, it’s never too late to learn.
- Courses. Check out money management courses to learn key skills in the areas you are lacking, whether that’s investing, accounting, paying off debt, or building a budget.
- Books. You can learn many money management skills just from reading books from other successful people.
- Podcasts. Podcasts are a great way to grow your money management skills on the go.
- Social media. There are an incredible number of financially focused social media accounts these days full of money management tips and free education.
- Practice. Perhaps the most important of all, you need to practice to get better at money management skills.
General money management tips
Finally, these are some of my top money management tips for getting you started on your journey to building a better financial future.
- Spend what is left over after you have saved, rather than the other way around. Once money enters your account, you’re already counting it as yours and therefore much more likely to go on a spending spree. Instead take a moment to put your money into your pre-agreed saving, investing, and budget pots so only what is left over is available to spend.
- Utilize online banking features that allow you to track your spending, and create dedicated pots and targets to aim for in different spending and saving categories.
- Lower your risk by building a diverse investment portfolio. Instead of having all of your eggs in one basket, experiment with a range of investment types. These might include stocks and shares, real estate, precious metals, or cryptocurrency – but do your research before making a decision.
- One of my favorite money management tips is to get inspired by those who have already gotten to where you dream of being. Start with this post on the richest people in the world, and you’ll be motivated to start taking your money management more seriously.