News flash: You don’t have to make a lot of money to be good at managing it! In fact, if you can master managing money with less income, you can make some amazing progress when more income eventually comes your way.
Hopefully you’re thinking “Challenge accepted!” Regardless of how much money you make, I want you to know that you can become great at managing it.
Keep reading for 5 ways to manage money like a pro and feel in control of your finances!
5 Ways to Manage Money Like a Pro
#1 Savings transfers are set up on auto-pilot
One of the best personal finance rules to follow is “set it and forget it.” This is especially useful when it comes to savings transfers. When you’ve created your budget and know how much you can afford to save, you can set up automatic transfers from your checking to your savings.
Having automatic savings transfers set up helps take the pressure off of you to remember to save on a regular basis. It’s a one-time setup and then BOOM!—you’re golden.
You’ll want to make sure you go the extra step of understanding how much you can afford to have saved automatically. This will make sure you’re not constantly tapping into the money you save. The goal is to keep it there until you need it or reach a specific goal.
#2 Off the top of your head, you know what your monthly profit should be
When I have my financial focus calls with potential clients, one of the most important questions I ask is “What should your monthly profit be?” Meaning, after all of your bills and spending, how much should you have left over?
It’s not a matter of how much you actually have left over (that’s a different conversation) but a matter of how much you should have left over. When you know that you should have a profit, and you’re not seeing it, the issue is with your budget and spending.
When you know better, you can do better.
You can determine what your monthly profit should be by reviewing (or creating) your budget. After all of your bills and spending, and based on your income, how much money should you have left over? Always know that number!
#3 You’re taking advantage of tax-benefit options (HSA, 401(k), 529, etc.)
Smart money managers are always thinking of ways to save their money. A great form of savings, and a great way to manage money like a pro, is by taking advantage of tax-benefit options available to you.
Most employers offer some sort of health savings account. This could be as an HSA, which means you have that savings for life, or an FSA, which means the funds need to be used by a certain time. Check out Health Benefits Basics to learn more.
Other tax-benefit options include contributing to a 401(k) plan, commuter benefits, and more. Make sure you know the benefits, tax-savings or not, available to you as an employee of your company.
#4 You always have a game plan for extra income
One of the best ways to get ahead in your finances is to always have a game plan for extra income, even before you know it’s coming! When you already have a plan for extra money, you’re decreasing your likelihood of spending it on something you don’t need.
You know that everything is covered by your budget, so anything extra can help you reach your goals faster or pay for an unexpected expense. The point is to think through extra money before it comes, that way you’re always a step ahead of yourself—especially if you tend to be an over-spender!
#5 Late payments are a foreign concept
If you want to manage money like a pro, you need to always pay your bills on time. Not only does this help you save money (geez, late fees are pricey), but it also helps your credit score. Payment history is the biggest factor in your score, so late payments have a huge impact.
The best way to always pay on time is to have a system for your money, whether it’s bills on autopay (remember “set it and forget it”?) or calendar reminders and notifications. It doesn’t matter what method you use to pay your bills on time, you just need to make sure you do.
Related: 7 Money Management Rules that Changed the Game for Me
If you can get a good flow going with the 5 tips above, you’ll be managing money like a pro in no time! Most of us were never taught how to manage our money, so be graceful with yourself. We’re essentially undoing years of conditioning! It will take time to get to a place where you fully feel in control, but I promise you will get there!
What ways do you feel like you manage your money well? Are you good-to-go with the items above? Drop a comment below to share with the community!