Some people are great at budgeting, it’s second nature to them, the minute they get paid, they put aside money for their expenses, savings, entertainment etc. And ensure they have a bit of wiggle room to make it to their next pay day. Others spend their pay check like it’s feast or famine. They tend to blow most of it within the first week and then live bare bones until their next pay day rolls around again.
Watch Instead: How can I best manage my cash flow
If this sounds familiar to you, then keep reading; this article will teach you four easy ways to manage your cashflow that you can implement today. After all, managing money is an important life skill to master as it can ensure you don’t get into bad debt or tricky situations where you don’t have the means to pay for basic necessities or an essential expense.
1. Find out what is happening
The first tip is to get a three-month snapshot of your finances. Look at the last three months of your financial statements from your banking app, or banking website to find out where your money is going and what you’re spending your money on.
2. Use account buckets
What the heck is that? Account buckets are just multiple bank accounts. Divide your money up based on what you have found in your three-month snapshot. I.e. expenses, savings, splurge, in case of emergency fund, etc. You can usually set these up yourself from your bank account and it’s a really helpful way to ensure you can track and manage where your money is going to and from as you can easily see it within these different accounts.
3. Use a budgeting app
Some people hate the bucket system and would prefer their money in one account. If this is you, then you can instead use a budgeting app. It’s very simple to set up and very simple to track. Many of them will connect to your bank account so you don’t have to add in every single transaction. This is a simple and effective way to improve how you manage your cashflow.
4. Plan your money ahead of time.
Use a spending plan, which is slightly different than a budget. A budget looks backward, whereas a spending plan looks forward. If you’re just starting out with budgeting etc. we recommend planning out the next month or few months and then once you’ve got a grasp on this, planning out the whole year. We have an annual spending plan on our website which you can download here.
So there you have it, four tips to manage your cashflow that are super easy to implement and can be used so that you feel more in control of your finances, instead of your finances having control over you.
You feel like that you need a little bit more help with your cashflow and need a little bit more than these tips, book a 15-minute Financial Coaching chat so we can talk to you about how to best use the money that you have so that you can best manage your money, pay off debt quickly, and stop living pay check to pay check.
Keep in mind this article is providing general information and not individual financial advice.