10 Basic Money Skills Everyone Should Have
1. Control Your Spending
You may be thinking 5% is too much to set aside. If you’re just getting by each month, it may be time to take a step back and look at the big picture.
Today’s culture is driven by unprecedented consumerism. Ads were always part of the radio and tv experience, but modern technology has changed the game. Data from smartphones and computers tailor advertisements to speak directly to you, encouraging everyone more than ever to spend, spend and – you guessed it – spend.
The key to controlling your spending is becoming conscious of your spending habits. Take a few moments to examine how you spend your money each month
2. Let your money make money
Putting your money or resources in investments is one of the most popular money management skills you’ll hear from people. It’s allocating money or other resources to grow them and generate income or revenue in the future. You can try searching for investment companies online to better understand which product best suits your needs.
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You can explore some interesting investment strategies like holding where you buy bitcoin, hold it for a very long time, and sell it when the time is right. This is very popular, especially with new investors.
You can also find lots of online marketplaces where you can buy and sell bitcoin like Paxful, and make money from crypto arbitrage trading.
3. Manage your subscriptions and memberships
Memberships and subscriptions are useful and fun until you forget you’re subscribed to dozens of services you’re not using. This might include gym memberships, or online subscriptions like Netflix, Spotify, LinkedIn, and others.
It’s essential to keep track of these, so you’ll know if you’re still maximizing the services you’re paying for. If you notice and find some subscriptions that you no longer use, you should consider cancelling them right away!
4. Know that there will always be another sale
Among the most popular spending triggers we have are clearance sales or major markdowns. This is when we usually go on shopping sprees because things are 10, 25, 50, or even 75 percent off. We buy because of the fear of missing out on those discounted items—not because we need ten pairs of high-waist shorts or twenty pints of ice cream.
Putting up signs like “sale” or “discounts” is a tactic used by stores to trigger your urge to spend. Don’t fall for this trick and remember, cheaper doesn’t always mean better!
Among the best money skills you need to practice is being conscious of your spending—it may be helpful to know your priorities.
5. Savings before expenses
When your monthly salary comes, you probably set aside some for groceries, utility bills, and other essentials right away. Some people’s savings come from what’s left after paying all the necessary expenses. While that strategy works for some people, others are left with little to zero savings depending on how fat your paycheck is.
To avoid that from happening, you might start putting aside a realistic amount directly into your savings account before allocating your money for bills and other necessities. This may prepare you for unexpected expenses and save you in case you get low on cash. You may also learn how to maximize the remaining amount you have and not spend beyond that!
6. Create a budget
This might sound obvious, but budgeting your money allows you to have a clearer picture of where your money goes. This includes your grocery list, utility bills, personal savings, emergency funds, and other things you need money for.
By budgeting, you can allot portions of your income in things that really matter. It may also be an effective way to avoid spending leaks and save up for sudden expenses or emergencies. Being on a budget also allows you to spend your extra cash on items you want—without feeling guilty about it!
7. Live within your means
Here’s another must-have practical money skill: don’t buy something you can’t afford, especially if you have other important bills to pay. You wouldn’t want to see yourself frowning over a low bank account balance, right?
Maybe that wristwatch looks really good on you, but is it still within your budget? If not, then you can leave it at the store and come back for it when the time is right.
7. Live within your means
There’s a great deal of side gigs that can be a nice source of extra income. Know where you’re good at and turn that passion, hobby, or skill into profit! You can stream your gameplay on various platforms, sell delicious pastries online, take writing or editing gigs, translate some write-ups, or transcribe audio files, during your free time. You can add your extra income to your savings or spend on stuff you like later on.
9. Note your bills’ due dates
Your friend may be okay with you running late to a meeting, but don’t be late when it comes to paying your bills. Late payments often come with penalties or charges, and if you’ve already set aside money for your bills, that means you have to take out an extra amount outside of your budget.
Check and note all your bills’ due dates to ensure that they’ll get paid on time, so you won’t have to spend extra bucks!
10. Compound Your Investments
The first three skills are all about mastering money management and getting your financial house in order. Now, it’s time to consider what to do with all the money your saving. Investing in yourself doesn’t mean new clothes and spa days. You need to invest in the market and make sure your money is making money. There’s plenty of investing options, but they all rely on one underlying principle: compounding.