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15 Simple Money Management Tips You Can Start Today

6 minute read

By Jim Greene

Smart money management is one of the most important keys to financial success. As the old saying goes: look after the pennies and the dollars will look after themselves. This wise advice is as true today as it was a century ago. Best of all, modern tech tools make it even easier to budget, track your spending, and work toward savings goals. With that in mind, here’s a rundown of 15 effective and easy strategies you can incorporate into your finance management plan right away.

Set Goals

Setting a financial goal forces you to impose structure and discipline on your spending habits. The goal itself is less important than the act of setting it. Uyou can choose a small goal like saving up for a new smartphone or a big one like saving up for your retirement. Either way, you’ll start think about money differently when you’re working toward an end objective.

Create a Budget

Setting up a monthly budget is one of the best money management decisions you can make. Budgets help you avoid overspending and racking up debt, leading to better overall financial health. There are three main personal budgeting systems people use: the envelope budget, the 50/30/20 budget, and the zero budget.

With the envelope budget method, you will create spending categories that include housing, food, transportation, utilities, clothing, and entertainment/leisure spending. Then, you allot a set amount in an “envelope” for each category, which sets the category’s monthly allowance. When the money’s gone, you stop spending on that category until next month. If you have a surplus, put it toward the next month or redirect it to savings or debt.

A simplified method is the 50/30/20 approach. Here, you’ll assign 50% of your take-home pay to mandatory expenses, like housing, food, clothing, and utilities. Then, allow yourself 30% for personal spending: entertainment, dining out, travel, and other discretionary purchases. The remaining 20% goes toward savings and paying down debt.

The zero budget method is strict but effective. First, you meet all your mandatory spending requirements. Then, assign all leftover money to savings or debt reduction. This leaves zero for non-mandatory purchases, which is where the budget gets its name. Zero budgets require discipline and sacrifice, but they’re fantastic for helping you get out of debt or stay afloat if you’re living for payday.

Cut Down Your Debt

If you’re carrying a lot of credit card or loan debt, you need to take a big bite out of your balance if you ever want to get ahead financially. Thus, it’s a good idea to temporarily redirect your savings into a debt reduction plan. The more debt you can erase, the less interest you’ll pay. In the long run, that can lead to thousands or even tens of thousands of dollars in savings.

Pay Off Small Debts First

If you’ve got multiple debts, work on clearing the small ones first. Larger ones will accumulate more interest, but erasing a debt altogether is really good for your fiscal self-esteem. You’ll see firsthand how some planning and control can help you achieve an important financial goal.

Cap Your Credit Spending

Building a better credit score and reducing your overall debt load are two very desirable results of this easy strategy. Cap your credit spending at 30% to 40% of your total credit limit. This will ensure you don’t rack up dangerous amounts of debt, and it will also keep your debt-to-credit ratio in favorable territory. Credit reporting agencies carefully consider your debt-to-credit ratio when tabulating your score, as it is considered a major indicator of your ability to responsibly manage credit.

Ditch Credit Altogether

The “all cash, all the time” approach has its limits. It doesn’t help you build credit, as you won’t be using your credit card. It can also eat into your savings goals, as you’ll be using cash for everything instead of allotting a specific amount for savings. However, it carries one huge benefit: you will never accumulate debt. If you have a history of problematic credit spending, this is an easy way to stop it.

Start Investing

You don’t have to be a market whiz to make money investing. Even super-safe vehicles like money market mutual funds can deliver better returns than savings accounts, all with very little risk to your principal. Banks and financial advisers also offer investment products that can help you accelerate your savings without requiring any expertise on your part.

Find a Passive Income Source

Interest you earn on investments is one type of passive income. There are many others, with real estate being a leading example. If you’re not keen about being a landlord, you can also invest in real estate investment trusts (REITs). They deliver many of the benefits of owning real estate without any of the extra work. The best REITs also pay guaranteed dividends.

Save on Everyday Items

Generic counterparts to everyday items like household cleaners, facial tissues, toilet paper, detergent, snack foods, and similar items cost less while delivering functionally identical utility. Trim your spending on brand-name products. The savings will add up over time. Consider replacing your single use products with re-usable alternatives. It’s a bit of an expense up front, but provides long-term savings.

Track Your Spending

Online banking and other digital tools can really help you stay on top of your spending habits. Track every purchase you make by keeping receipts for cash transactions and reviewing all items on your monthly credit card statement. Chances are you’ll see some areas for potential improvement. See our list of the best budgeting apps to see if there’s one that helps you keep your finances more organized.

Do You Really Need That?

High-end coffee from trendy cafes and restaurant lunches are two of the biggest culprits when it comes to unnecessary spending. Frame these purchases by putting them in perspective. If you make $25 an hour and lunch costs $15, that’s 36 minutes of work. Is it worth the money, considering you could just spend an extra 10 minutes in the morning to pack yourself a sandwich? Or buy a decent coffee maker and a quality thermos, so you can stop giving Starbucks $100 a month.

Perform Regular Self-Audits

Every financial quarter, do a thorough self-audit that assesses all your savings, investments, debts, and other financial commitments. Calculate your total net worth, then track it over the course of a year. Keep things moving in the right direction all the time and your finances will work out well in the end.

Access and Review Your Credit Report

Consumers are entitled to receive one copy of their credit report from each of the three main reporting bureaus once every 12 months. Take advantage of your rights and request them. Review them for accuracy and dispute any incorrect entries that may be negatively affecting your credit score.

Cap Your Leisure Spending

Do you spend too much on things you don’t strictly need? It’s time to introduce some spending limits. Commit no more than 25% to 30% of your take-home pay to leisure and lifestyle spending. It’s not even that hard. Go to the movies still, but skip the expensive popcorn. Pack a picnic instead of an expensive dinner out with your significant other. Hit up local museums or parks, which often have free (or very cheap) entry fees. You don’t have to stay home and be bored just because you’re trying to spend less.

Shop On Your Own

Shopping with friends often leads to splurges, as studies have shown that group dynamics can have a major influence on spending habits. Avoid temptation by going to the mall on your own, and only when you actually need something. Avoid going shopping simply as a way to kill an afternoon.

Wrapping It Up

These are just a few basic examples of powerful management strategies that can help you build a healthier relationship with money. If you’re only going to adopt a few, we recommend implementing a budget and setting goals that involve long-term saving. They are the most important factors in preparing for a lifetime of financial health.

Wallet, Calculator and Other Money ToolsShutterstock

Jim Greene


Jim Greene is a freelance writer based in the Toronto, Canada area. He has been writing professionally since 2001 and has an extensive professional background in consumer research, personal finance and economics.


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