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Fine Tune Your Money Management

Are you satisfied with the way you handle your finances? Even if you’re pretty good about keeping your spending and saving on track, you probably know areas that could use improvement. Use these do’s and don’ts to help fine tune your habits.  

DO Keep a Budget 

It’s hard to know if you’ve gone off track if you don’t know what your goals and limits were in the first place. In a budget you ask: 

  • How much do I make each month from my salary or other sources?  
  • What are my regular monthly cash needs? That includes rent or mortgage, utilities, payments on outstanding debt, groceries, daily spending money, commuting and other regular costs, as well as savings. Be sure to include everything you can think of so that there are no unpleasant surprises at the end of the month. And if you’re self-employed or don’t have taxes withheld from your income, don’t forget the amount you need to set aside each month to cover quarterly estimated tax payments.  

Subtract your needs from your income and what’s left is your disposable income, aka money you can use for special purchases—or consider adding to your savings or retirement account.  

DON’T Buy in Haste 

Are you hankering for new shoes, a new phone, or some other splurge? Hold off for a few days before you act. Whatever seemed so exciting at first may lose its appeal after a cooling off period. Unable to resist? Get in the habit of leaving your credit cards at home. Handing over cash can make the impact feel more real. The key here is giving yourself time to consider how you can fit the purchase into your budget and whether you’ll be better able to afford it if you save a little longer. With a little research, online or at other stores, you may find, too, that you can find your splurge item for less.  

DO Plan Ahead 

Are you hoping to buy a house, send your kids to great colleges or have a secure retirement? Begin as soon as possible to estimate what you might need to reach your goal and set aside savings to achieve it. Even if you start with a couple of dollars a week, you’ll be glad when you see it build up over time.  

DO Have Fun 

Good money management is not just about following rules and setting limits, it’s about allowing you to benefit from your money to the fullest. In other words, save wisely so you can spend happily. That means you should allow yourself a small splurge now and then. Don’t worry if you spend what seems like a lot on a family activity, hobby or big purchase that you love, as long as you can afford it. In the end, your goal is to feel fulfilled in your life. A positive attitude is also more likely to keep you focused on good money management habits.