8 answers
Dana
Student
Charleston, West Virginia
1
Question
Asked
457 views
How do you manage your money?
The best way to save money is to pay some money into a savings account every month. Once you've set aside your emergency fund, possible savings goals to consider might include: buying a car without taking out a loan. taking a holiday without having to worry about the bills when you get back.
8 answers
Daniel Maynes
Credit Manager
188
Answers
Dallas, Texas
Updated
Daniel’s Answer
Hi Dana!
The very first thing I would do is make yourself a monthly budget. There are many good apps/online tools you can find online. Many online tools can help you categorize certain expenses and they usually have graphics that can help you visualize your progress. You can also do it the old fashioned way on Excel.
After you set up a budget the next best thing you can do is sleep on it and really ask yourself if you need the item. I would encourage you to really think through what you will use the item for and for how long. Also, think about the big items in life you need to save for such as a house, possibly kids, retirement, etc. You are never to young to start saving for these big ticket purchases in life.
The last thing I would do is don't compare yourself to others. One of the most dangerous things is comparing yourself to people and thinking if they can have it so should I. Don't fall for that trap of "keeping up with the joneses" because comparing yourself to people and their things is not a good idea. It will only lead to misery and feeling like you are failure.
Hope some of the above provides insight.
The very first thing I would do is make yourself a monthly budget. There are many good apps/online tools you can find online. Many online tools can help you categorize certain expenses and they usually have graphics that can help you visualize your progress. You can also do it the old fashioned way on Excel.
After you set up a budget the next best thing you can do is sleep on it and really ask yourself if you need the item. I would encourage you to really think through what you will use the item for and for how long. Also, think about the big items in life you need to save for such as a house, possibly kids, retirement, etc. You are never to young to start saving for these big ticket purchases in life.
The last thing I would do is don't compare yourself to others. One of the most dangerous things is comparing yourself to people and thinking if they can have it so should I. Don't fall for that trap of "keeping up with the joneses" because comparing yourself to people and their things is not a good idea. It will only lead to misery and feeling like you are failure.
Hope some of the above provides insight.
Tara Cortez
Chaplin and Volunteer Resources Researcher
24
Answers
Autryville, North Carolina
Updated
Tara’s Answer
ESSENTIAL GUIDELINES FOR EFFECTIVE SAVING
The advice provided here is not just beneficial, but a fantastic choice. However, a crucial tool you'll need is a classic financial journal. It's a simple yet powerful way to keep track of your finances. Jot down every single cent and categorize them as follows:
- Living Costs – This includes rent, utilities, phone/internet services, insurance, daily medications, food, loans, and so on.
- Educational Expenses – Tuition fees, textbooks, laptop, other necessary equipment, student loans, commuting costs, and more.
- Leisure Activities – Expenses for concerts, holidays, dining out, movies, and the like.
- Unforeseen Costs – Medical bills, medications, car repairs, appliance maintenance, tech repairs, and similar unexpected expenses.
- Nonessential Purchases – Items like clothes, games, food, drinks, cars, and so on.
- Savings in Bank Accounts
- Certificates of Deposit (CDs)
- Bonds
- Traditional Savings Methods like a Cookie Jar or Piggy Bank
Remember, if it's a recurring monthly bill and is essential, it should fall under living costs. However, if it's a luxury or a hobby, like a Netflix subscription, consider it as a leisure activity. It's not a necessity and your life won't be disrupted without it. Treat your educational expenses with the same importance as your living costs.
When considering leisure activities or nonessential purchases, evaluate if you can delay them or perhaps find them on sale later. Keep in mind, many items tend to have discounts during holiday seasons.
Moreover, always reserve some funds for unforeseen costs. Life is unpredictable and it's always better to be prepared for any financial surprises.
I hope these guidelines will assist you in your saving journey. Wishing you all the best in building your savings!
The advice provided here is not just beneficial, but a fantastic choice. However, a crucial tool you'll need is a classic financial journal. It's a simple yet powerful way to keep track of your finances. Jot down every single cent and categorize them as follows:
- Living Costs – This includes rent, utilities, phone/internet services, insurance, daily medications, food, loans, and so on.
- Educational Expenses – Tuition fees, textbooks, laptop, other necessary equipment, student loans, commuting costs, and more.
- Leisure Activities – Expenses for concerts, holidays, dining out, movies, and the like.
- Unforeseen Costs – Medical bills, medications, car repairs, appliance maintenance, tech repairs, and similar unexpected expenses.
- Nonessential Purchases – Items like clothes, games, food, drinks, cars, and so on.
- Savings in Bank Accounts
- Certificates of Deposit (CDs)
- Bonds
- Traditional Savings Methods like a Cookie Jar or Piggy Bank
Remember, if it's a recurring monthly bill and is essential, it should fall under living costs. However, if it's a luxury or a hobby, like a Netflix subscription, consider it as a leisure activity. It's not a necessity and your life won't be disrupted without it. Treat your educational expenses with the same importance as your living costs.
When considering leisure activities or nonessential purchases, evaluate if you can delay them or perhaps find them on sale later. Keep in mind, many items tend to have discounts during holiday seasons.
Moreover, always reserve some funds for unforeseen costs. Life is unpredictable and it's always better to be prepared for any financial surprises.
I hope these guidelines will assist you in your saving journey. Wishing you all the best in building your savings!
David Evans
Personal Banker
3
Answers
Reston, Virginia
Updated
David’s Answer
You may want to consider Certificates of Deposit (CD's) CD's will typically pay much higher Annual Percentage Yields (APY) than traditional Money Market or Savings accounts.
The downside is that a CD being a time deposit is not as liquid as a savings account, so if you need emergency access to the funds there may be a small penalty for early withdrawal. Although on the plus side not being as liquid can help you remain focused on your savings goals and the added benefit of the higher APY will compound your earnings significantly.
You can open a CD with most banks for as little as $500
The downside is that a CD being a time deposit is not as liquid as a savings account, so if you need emergency access to the funds there may be a small penalty for early withdrawal. Although on the plus side not being as liquid can help you remain focused on your savings goals and the added benefit of the higher APY will compound your earnings significantly.
You can open a CD with most banks for as little as $500
Mohit Goyal
Software Engineer
50
Answers
Gurugram, Haryana, India
Updated
Mohit’s Answer
You're already doing a fantastic job by setting aside savings each month - that's a huge step!
Planning your budget in advance is a smart move. You should allocate funds for essentials like rent, groceries, and transportation, as well as important aspects such as tax planning, investments, and social commitments. Even if
I keep a tight rein on my budget, it's understandable that unexpected expenses or a little extra spending from my wife can happen.
Furthermore, adopting the practice of noting down your expenses is a great idea. You could use an app to keep track if that's more convenient for you. Remember, the goal is to monitor and adjust your spending habits in real time, rather than reflecting on them at the end of the month. Keep going, you're on the right track!
Planning your budget in advance is a smart move. You should allocate funds for essentials like rent, groceries, and transportation, as well as important aspects such as tax planning, investments, and social commitments. Even if
I keep a tight rein on my budget, it's understandable that unexpected expenses or a little extra spending from my wife can happen.
Furthermore, adopting the practice of noting down your expenses is a great idea. You could use an app to keep track if that's more convenient for you. Remember, the goal is to monitor and adjust your spending habits in real time, rather than reflecting on them at the end of the month. Keep going, you're on the right track!
Lilly Barrett
2
Answers
San Antonio, Texas
Updated
Lilly’s Answer
A very short and simple answer to this is to minimize your subscriptions and avoid impulse purchases or buy from stores that have a good return policy. As an impulse buyer myself I often find myself buying clothes I like and then never wearing them and wishing I could return them. Either waiting a few days to decide if I really need it or having the option to return it if I change my mind has saved me a lot of money!
Osama Khan
Investment Banking
1
Answer
London, England, United Kingdom
Updated
Osama’s Answer
Set up a monthly account for all your income. Deduct 15% from this for savings. Use the remaining amount for your necessary expenses first, and then for optional ones.
Marshall Main
Director, Manager, Videographer
75
Answers
Raleigh, North Carolina
Updated
Marshall’s Answer
Dana-
There are apps that can help with this as well. Depending on your bank, sometimes they will have something that is available in their own app but if not, you can find many options online. Try googling "Budgeting apps" for your phone/ computer operating system or app store. But I would start with your bank first. You can call them and they will have someone who can walk you though these kinds of things.
There are also usually classes, courses or information provided for free by the City and state, you can usually speak to someone at a community center or townhall to get more information.
Another thing you can consider is investing your savings. You will want to keep an amount of cash available for emergencies, and that number will really depend on you and what is comfortable for you. There are several reputable stock brokerage firms out there and many of them will even set you up to speak to a broker for call if you have questions to ask. You can get a return on your money even investing in BONDS (5%) more than you do leaving it sitting in the bank (which is usually less than 1% - my bank pays 0.07%). I do a lot of investing and have an average return rate of more than 20% (so for every $1000 per year I put in, I get at least $1200 back- a $200 gain). Investing is a great way to allow your savings to grow while you aren't really looking. It's not for everyone, and I would recommend you do some research before diving in to be sure you are comfortable how it works. [scams do exist] And there are a lot of different approaches to working the stock market.
There is also (depending on your budget) assets that can be invested in. Flipping real estate is something a lot of people do. This again will require some research, there are classes and books about it. It's not something I personally do.
Building a budget is a good practice. There are also classes and books about how to build a successful one (some are free/ no cost), looking at how and what you spend money on and plan for financial security in the future. You can go to your local library and look for books for "Beginner Budgets" or "Creating a budget". There are also free templates online for Google sheets and Excel that can give you a starting point. You can also start by just creating a list of everything you are spending money on, keep your receipts when you go shopping.
You will have two kinds of expenses; Fixed and Unrealized. Fixed are things like Rent, Subscriptions or Utilities [Internet, power, water, trash] (which may vary by the month in amount a little, but you will always have this bill - so you can take an average or set a number you know will be at or below). You can track your fixed expenses against your unrealized ones and your income in your budget sheet. Tracking the unrealized expenses is where you can "manage" your finances. There also may be some Fixed expenses that might need to/can be stopped or be unnecessary to survival (such as Netflix or a cheese of the month subscription). You can see where things are going a little better using a budget spreadsheet and adjust accordingly. You may be spending too much on entertainment (eating out, going to events) or cloths you don't need or buying gadgets or toys on Amazon that are just sitting around collecting dust.
Once you know how much you need at a minimum each month, you can then manage that number against what you need if an emergency happened and what you have left, where you put it.
There are apps that can help with this as well. Depending on your bank, sometimes they will have something that is available in their own app but if not, you can find many options online. Try googling "Budgeting apps" for your phone/ computer operating system or app store. But I would start with your bank first. You can call them and they will have someone who can walk you though these kinds of things.
There are also usually classes, courses or information provided for free by the City and state, you can usually speak to someone at a community center or townhall to get more information.
Another thing you can consider is investing your savings. You will want to keep an amount of cash available for emergencies, and that number will really depend on you and what is comfortable for you. There are several reputable stock brokerage firms out there and many of them will even set you up to speak to a broker for call if you have questions to ask. You can get a return on your money even investing in BONDS (5%) more than you do leaving it sitting in the bank (which is usually less than 1% - my bank pays 0.07%). I do a lot of investing and have an average return rate of more than 20% (so for every $1000 per year I put in, I get at least $1200 back- a $200 gain). Investing is a great way to allow your savings to grow while you aren't really looking. It's not for everyone, and I would recommend you do some research before diving in to be sure you are comfortable how it works. [scams do exist] And there are a lot of different approaches to working the stock market.
There is also (depending on your budget) assets that can be invested in. Flipping real estate is something a lot of people do. This again will require some research, there are classes and books about it. It's not something I personally do.
Building a budget is a good practice. There are also classes and books about how to build a successful one (some are free/ no cost), looking at how and what you spend money on and plan for financial security in the future. You can go to your local library and look for books for "Beginner Budgets" or "Creating a budget". There are also free templates online for Google sheets and Excel that can give you a starting point. You can also start by just creating a list of everything you are spending money on, keep your receipts when you go shopping.
You will have two kinds of expenses; Fixed and Unrealized. Fixed are things like Rent, Subscriptions or Utilities [Internet, power, water, trash] (which may vary by the month in amount a little, but you will always have this bill - so you can take an average or set a number you know will be at or below). You can track your fixed expenses against your unrealized ones and your income in your budget sheet. Tracking the unrealized expenses is where you can "manage" your finances. There also may be some Fixed expenses that might need to/can be stopped or be unnecessary to survival (such as Netflix or a cheese of the month subscription). You can see where things are going a little better using a budget spreadsheet and adjust accordingly. You may be spending too much on entertainment (eating out, going to events) or cloths you don't need or buying gadgets or toys on Amazon that are just sitting around collecting dust.
Once you know how much you need at a minimum each month, you can then manage that number against what you need if an emergency happened and what you have left, where you put it.
Todd Painter
Communications and Digital Workplace Leader
5
Answers
Dallas, Texas
Updated
Todd’s Answer
As soon as you can, create a budget and always live within your means. Decide what lifestyle you want and make sure to find a job that can support it. Find a company that has excellent retirement planning and start investing right out of college and don’t touch it. If you have a company match be sure to meet the percentage or more—don’t throw money away. You’ll be amazed at how quickly it begins to add up after 10 or so years. You have to start now to build for the retirement life you want. And build your credit along the way. Basic advice, there’s likely others on here who can give more specifics, but these are general rules that are smart to stick to and will make life much easier. It takes discipline, sacrifice, and commitment, but it’s well worth it.
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