7 Money Management Skills you need in 2024
What does the thought of your finances do to your mental health?
Managing your money can be so difficult, especially when your bills are more than your income. And the fact that it is something that you have to learn outside the four walls of schools makes it more tiring, but nonetheless, it is achievable.
With the right money management skills, you can be financially free and make the most of your money.
What exactly are money management skills?
Money management skills are the skill sets and information required to efficiently manage your finances. These skills help you design a long-term financial strategy that will allow you to reach your financial goals while living the life you want.
Money management allows you to have financial blueprints of where your money is going and what you can do better.
7 Money Management Skills You Need in 2024.
1. Have a clear financial blueprint.
The first skill for managing your finances effectively is to have a clear financial blueprint. The financial blueprint here is budgeting.
Yes, you read correctly!
It’s incredibly simple to make your own budget, but it can be so tiring to follow it. However, if you are the type of person who easily slacks off on things, you definitely need one. This will help you stay away from bad money habits and focus on maintaining healthy financial behaviours.
2. Setting realistic financial goals
Setting and sticking to financial goals is one of the most important money management skills. This could range from debt repayment to having enough money to retire comfortably. So to be financially free, you must set a clear financial goal for yourself.
“A clear financial goal tells you what you can or cannot afford, although it doesn’t stop you from enjoying comfort.”
3. Monitor your spending.
How often do you monitor and review your spending?
This money management skill will help you keep track of your cash flow, which is a way of saying, “You must know where your money is going.” Many people learn after tracking their expenses that they are spending more impulsively than they imagined, such as ordering signature bags online and also on subscriptions.
With a wider visibility of how your spending goes, it will be easier to create an accurate budget and consider reallocating funds to projects that will have a longer-term impact, such as investment and retirement savings.
4. Improving Your Credit Score
Your credit score is calculated using your payment history and credit utilisation, and it is often taken into consideration by lenders if you want to lend money. That means the higher your credit score, the more likely you are to get accepted at a reasonable interest rate for whatever loan you’re applying for.
To nurture your credit score, you must do the following:
- Keep your debt levels low.
- Pay your bills on time.
5. Build your emergency fund.
If there is one thing the current economy has taught you, it should be to keep an emergency savings fund.
Typically, emergencies are unplanned issues that arise when you least expect them, and having an emergency savings fund will help you when such needs arise.
This fund must be readily available, not just planned in your head and must be enough to cover three to six months of living expenses.
6. Invest like an expert.
To generate wealth, you must understand and leverage the power of investment.
Investing is not about how much money you make now. The idea is to start somewhere and develop long-term wealth with the little you can invest.
Investing generally allows your money to grow over time by taking advantage of compound interest and dollar cost averaging. The best part is that you don’t need to start big. Start small and be consistent.
7. Learn everyday
The more you learn, the more you know and because knowledge is power, you have to keep learning about your finances.
Learn to understand:
- Budgeting.
- How your savings account works.
- If your investment is growing.
- Wealth generation network.
The better your understanding of personal finance, the greater your success in the future.
Money management takes consistency, patience, time, and confidence to grow, but it’s worth it. From today on, make it an action plan to use these money management skills and see how your finances turn around.
If you find this blog helpful, give it a clap and a comment.
Follow me on:
- Email: seunfunmiokunowo@gmail.com
- LinkedIn: @Oluwaseunfunmi Okunowo
- Twitter: @moneynerd_
- Instagram: @moneynerd_
