If you have a home loan or are looking at getting one, money management has become more important than ever. Anyone who experienced income uncertainty due to Covid_19 pandemic will tell you how the economy can go from boom to bust with little or no warning.

So being able to save some money when the times are good is a useful skill to have. Our tips below will help you successfully save a portion of your income regularly and ensure you have sufficient money set aside to deal with difficult economic times should they arise.

Getting Your Budget Right

The first and most important aspect of money management is budgeting. Not everyone is willing to create a budget as many people feel it limits them considerably; however, creating a budget plan is not a negative thing, especially when it’s done correctly.

The first step in creating a budget plan is to record your income and expenses for a month. Don’t make any changes to your regular spending habits to ensure you get the most accurate information possible.

The result you acquire from this task will form the basis of your budget plan and will give you an overview of expenses you could do without.

Spend Your Money Wisely

Now that you have your list of expenses, you can see exactly where your money is going and look at ways to reduce your expenses where possible. Bills can pile up quite quickly and before you know it, you’ve already gone through most of your income.

By managing your bills, you can start spending your money more wisely. Looking at bills is an essential part of money management. It can provide you with insight into the services you are paying for.

If you believe you could save some money by getting a better deal, your bills will be the best starting point. And if you happen to have a home loan, which is likely to be your biggest debt, it’s also where you are most likely to save tens of thousands of dollars.

Reducing Debts Quickly

Debt can have a devastating impact on your money management, so it is essential to take care of any existing debt as quickly as possible.

Before you create your debt recovery plan, you need to take a look at all the debt you currently have. Find out how much you need to repay monthly and how much income you have coming in.

A big tip is to minimise the use of your credit card and always pay debt off quickly so you avoid paying too much interest.

Be Realistic about Money

When you implement your budget plan, it is very important to be realistic and don’t set goals that aren’t achievable.

Some people find it difficult to live within their budget, possibly due to a credit card debt or another repayment that is affecting their living expenses.

If this is the case, there are other options available and you can always seek expert advice if you are having difficulty sticking to your budget.

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Save for a Rainy Day

As mentioned earlier, saving is the key to a secure financial future. By setting a budget, reducing your debts and spending your money wisely, saving money will become a lot easier.

Saving for the future is one reason why people decide to implement a money management plan; however, you can also implement a money management plan for a specific goal. For instance, you may be saving for a deposit on a new home or you may want to buy a new car.

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This article does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.