How to Manage Your Money More Responsibly

Responsible money management is something that we allunderstand in theory but struggle to adopt in practice. The temptation ofluxury purchases and the stress of structuring personal finances in awell-calculated budget are just two reasons as to why financial stability ishard for many of us to maintain. Still, the advice in this post could makethings a little easier for you. Let’s talk about managing your money more responsibly.

Clean Up Your Monthly Bills

The first step to managing your money more responsibly is to clean up your monthly bills. Set yourself the 30-day rule with luxury purchases. If you still want the item then buy. If you don’t then you’ll have more money in your account at the end of the month. Still, luxury expenditures might not account for many of your monthly expenses. In fact, you might be quite frugal in that regard but still, have very little interms of disposable income. Maybe you should be looking at your necessary monthly bills instead. We’re talking about rent, food, gas, utilities, and other basic costs.

Before you start making compromises, however, simply think of cheap ways to get the same necessities. You could use coupons and vouchers to get the same weekly shop as usual for less money. You just need to do your research. You could also start growing your own fruit and veg, so those items don’t need to be bought from the grocery store. You might also want to look into Boost Mobile plans if your current phone provider is charging a lot. Prepaid phone plans can be cheaper and just as effective. If you want to clean up your monthly bills, then you just need to think of more cost-effective ways of getting the thingsyou need.

Start Thinking Of The Future

If you want to have a stronger financial situation, then you also need to think beyond your current costs. It’s important to cover your monthly bills, as discussed in the previous point, but you also need to think about future expenses. That’s why it’s wise to save up some money at home for unexpected events. Of course, an emergency fund is only the tip of the iceberg. You need a proper savings account that you regularly expand. Some future events are a little more certain.

For example, you’re probably going to retire one day, and your kids might want to go to college (or make a down payment on a car, ahouse, and so on). The point is that you should start thinking of savings for the things you can predict aboutthe future. An emergency fund is a safety net, but your savings account is your future bank account and investment pot. Start putting a fixed percentage ofyour monthly income into your savings account. With every passing year, you’ll have accumulated substantial savings for the future. Make sure you look into pension plans for your retirement to ensure that you’re getting as much money as possible for the future.

Thispost was written in collaboration. Collaborative writing means that while I have contributed to this post and edited its content and formatting, I am not its original author. By posting this content on my blog, I may receive financial compensation. Want to guest post for Jihi Elephant? Learn more here

What is the Minimalist 50:20:30 Budget System (and how to use it)

The 50:20:30 Budget is gaining popularity, particularly among minimalist populations. This budget helps you break down your goal spending into 3 categories making it easier to keep to your budget than a budget which is broken down into 5 or more groups. Keep reading to learn more about the 50:20:30 budget and how to use it!

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What is the 50:20:30 Budget?

The 50:20:30 budget is a simplified budget utilizing 3 categories: essentials, savings, and personal. I have been using this strategy on and off since I graduated high school and it has been the most effective budget strategy I have used yet! It is not only easy to use and simple but encompasses all possible spending without much categorical overlap to worry about. There are no excuses.

50 | Essential Spending

The first rule or spending category is essential spending. This category refers to your bills and any other expenditures that cannot be avoided and occurs regularly. This might include topics such as housing, utilities, groceries, transportation, insurance, electricity, internet, phone bill, etc. These bills do not include pleasure subscriptions, or anything extravagant and unnecessary. Remember that your essential spending is half of your income, so spend it wisely!

20 | Savings

The second budget rule is that 20% of your income is to be saved. This might include a savings account, emergency fund, retirement fund, or it might go toward paying off debt. Building up a savings is incredibly essential in case of emergencies, debt issues, retirement, etc. I can personally attest that my savings have saved me, financially, on several occasions! If you aren’t currently saving money regularly, open a savings account and get started today!

30 | Personal Spending

The final rule of 50:20:30 budgeting is that you get to spend 30% on anything else. This includes all recreational or entertainment purchases. This money can be set aside to go on vacation; it can also include clothing, hobbies, home decorating, gym membership, recreational, and entertainment expenditures. Here is where you can go crazy (so long as you remain within your budget) because this category is all you. Whatever your heart desires, this is the part of your budget you utilize to get it. Be responsible, but so long as you remain within 30%, you’re golden!

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How do I use the 50:20:30 Budget?

What makes the 50:20:30 budget so successful is the fact that it is minimal and simple. It’s easy to remember the rules, and it’s easier to keep track of, regardless of how you track your spending. My favorite way to track my spending is through Mint. Mint connects to all of my accounts, allows me to set my budget, savings goals, and even pay my bills. I highly recommend checking out Mint, its free!

Another great way to use this budget is to keep an excel spreadsheet of your spending or keep a written record in your planner or journal. Just knowing what the budget is, is not enough, you must now track your spending and be sure to adhere to the budgeting rules.

Get started on your budget, I’d love to hear how well it works for you!

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