If your New Year's resolution was to manage your money better, we've got you covered! Money management is going to be different for every person, especially when we all have different spending habits and attitudes about money. As a 26-year-old with thousands of dollars in student loans hanging over my head, I certainly don't pretend to have all the answers, but I CAN give you a few tried-and-true tips that will trick you into managing your money better so you can enjoy financial stability.
I find that the best way to find what money management strategy works for you is to know your own habits. Are you too tempted by credit cards? Do you view your money as the number in your bank account or the cash in your wallet? How impulsive are you when it comes to shopping? Understanding yourself will help this process a lot. If you're not sure, experiment with a few different strategies!
1. Switch to Cash Only
The cash-only method is one that many people follow. Personally, I'm not one of them, but if you're too tempted by credit cards and tend to overspend on your debit card, make a habit of carrying a certain amount of cash on you for the week. When the cash has run out, you have spent your weekly stipend and have to get by until the next time you "pay yourself." After a couple weeks of running out of cash three-days-in, you'll train yourself to work with what you have.
2. Save $50 Per Month
If you're concerned that you aren't putting money into a rainy day fund, turn it into a habit. Either set up a monthly automatic transfer from your checking account to your savings account, or put cash into a jar every month and force yourself not to touch it. Try putting it in a plastic water bottle! It will be easier to put in the bottle than it will be to get it out. That money will add up fast!
3. Track Spending with Apps
Use money tracking apps like Mint, Dollarbird, Fudget, Penny, etc. to learn more about where your money is going. If you spend too much on food or if your gas-guzzling car is eating up your paychecks, this will make it very easy to see what you're doing and set budgets to change your habits.
4. Try the Envelope System
Much like the cash-only plan, the envelope system forces you to switch to cash to manage your expenses. Every expense category gets its own envelope, such as rent, groceries, nights out, etc. Each month, you distribute money into each envelope by studying your past spending, and you can only spend the money in each envelope on what it was intended for. When it's gone, it's gone.
You can find more details about the cash envelope system here and start right away!
5. Meal Planning Weekly
I've learned just how much meal planning can save me money (and be healthier for me). If possible, make a calendar of your meals for the week, shop for the things you need all in one trip and avoid eating out that week. You already have a plan for meals, so you don't have to worry about the "I don't know what to eat" problem that would cause you to overspend on groceries or takeout. Treat yourself when you need to, but as long as you keep a stocked house with a plan for dinner, you'll reduce your food spending. Try a printable meal planner like this one!
Managing your money is definitely a learning process! I started young and have managed to save money and support myself as an adult, but my process certainly isn't perfect. Experiment with these and other tips to meet your money management goals this year!