Four Ways to Manage Your Finances More Effectively

If managing your money the right way is not something you’re famous for, don’t worry, you’re not alone. Plenty of Americans are bad at keeping control of their debt and following good money management habits. With so many credit cards, bank loans, and store cards available to us, it’s easy to get ourselves into situations where we owe far more money than we’re making; paying extremely high interest rates that make it tricky to get out of debt, and sometimes damaging our credit ratings with missed payments, which leaves us unable to use sensible borrowing when we need it the most. The good news is that there are many ways to get yourself out of debt and learn more positive money management habits. This article looks at four ways in which you can start to improve your money management strategies.

1.  Make sure you have a budget

A good plan makes everything easier, and if you don’t have a budget then you’re going to find it very hard to effectively manage your finances. Budgeting is all about being honest with yourself; making sure you know exactly what is coming in and what is going out. Once you are in the habit of keeping tabs on the reality of your financial situation, it will make decision-making easy, reduce your stress levels, and help you to plan how to pay off debt or save for big-ticket items, like a car or a house.

2.  Figure out where all the money is going

The first part of getting a budget plan up and running is to lay out exactly what you are currently spending. Put a spreadsheet together and list exactly what goes out each month. The easiest way to do this is to take a look at a month’s bank statement and write down where the money is going; including bills, entertainment, travel, food and drink, pet care, and so on. Not only will you get a realistic number to put into your budget plan, but you’ll also get a heads-up on some unnecessary outgoings.

3. Subtract your expenses from your outgoings

With your expenses column nicely researched and written down, you need to add your income to the formula so that you have a clear idea of what your money in and money out situation is. Are you making more than you’re spending? Great! A positive number will allow you to pay off debts faster, and once that’s done you can turn that excess into savings. Or, are you spending more than you’re earning? In that case you might need a different plan for getting out of debt so that you can start saving money and planning ahead. If you are struggling to get a loan due to a poor credit rating, find out how to fix your credit at

4. Take positive steps to improve your finances

Knowledge is power, and now that you have the transparency of a budget to work with, you can start to work out how best to improve your situation.

Perhaps look at consolidating your debts; this is where instead of paying off lots of smaller debts at varying interest rates, you look for a single, low interest rate loan that can cover them all in a single payment. This could save you a lot of money, help you pay the debt faster, and remove a lot of stress.

The trick to good finances is to get it all down on paper so you are in full control of the situation.

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.