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Last Updated on by Noni May
Money management is the kind of thing that really should be taught at school, but somehow never really is. It doesn’t matter whether you are a multimillionaire or you are scraping by each week, managing the money you have and making it work for you is really important for making the most of what you have.
You need to be able to recognize which investments are sound, how your funds should be balanced and find ways to make your money work harder for you. With the right skills, you can bring your money under your control and see your lifestyle improve without having to work longer hours.
Gradually building up your savings can be a long process, but just putting around 10% of your income into a savings account will help them to stack up. However, saving is a very personal matter and if you are already struggling to make ends meet, you may need to rethink your strategy somewhat.
There are lots of ideas for how to start saving when you have a tight budget, and not all of them are entirely helpful! One foolproof method, though, is to put any unexpected windfall into savings rather than splurge on something you don’t need. You should also shop around to make sure that you get the best deals for utilities like electricity and water, which can quickly add up.
If you have savings, you should be looking into the best ways to invest them in order to make your money work harder. Though having a nest egg is a good idea for emergencies, you could also argue that leaving any money sitting around doing nothing isn’t a good idea. Investing your nest egg in stocks, for example, could be a good way to make the money work a bit harder and give you better returns.
You could use an investment tool such as a mobile investment app to find the best opportunities with a smaller management fee. If you are wondering which app to go for, Investormint has plenty of advice for you to read through.
In order to make sure that you can achieve a great lifestyle as well as make your money work hard, you need to make sure that you are able to balance your funds and your assets well. You could put all of your funds into assets, but then you won’t be able to get by day to day – not a smart move. On the other hand you could liquidate your assets and just have money – again, not such a smart move either.
You must always start with building up your savings, and having the equivalent of about 6 months living costs is the target here. Anything after that, you can consider investing in assets. This is because you will need your savings to make the investment, but also because your savings make for a better safety net than selling assets in a financial emergency where you are unlikely to get the best price for them. Always remember that you will need to protect your assets too.