Account On It

Account On It

CategoriesFinance · Life

Finance is one of the most important parts of our everyday lives and is something that we almost never discuss with other people. Managing your money is a fundamental skill needed in our society, but not everyone is given the chance to develop these skills.

This is where, in my opinion, the school system lets students down the most. With the exception of useless math problems, finance and money were topics that were never covered in my school career. I can’t wrap my mind around how strange that is. I mean, I would guess that less than 10% of math students use trigonometry after graduating, but that is taught, while a skill that 100% of grown adults require to survive isn’t. Seems like someone missed the point somewhere along the way.

Managing your money is something left to be taught at home. You are intended to learn from your parents how to be financially responsible. This is where I count myself as lucky. My parents not only taught me the value of every dollar, but also the importance of saving for the future. Through their example I learned the skills I needed in this area of my life. But what about those that didn’t have a constructive example to emulate?

The facts speak for themselves, bad habits with money have devastating and long-term effects. It’s easy to live in the moment and not think about saving, but what happens when the future catches up to you? The best option is to work to develop money management skills now, so you can secure your future and someday give your children a role model to follow.

I am no financial advisor, but I thought I would break the ice by sharing some tips and trick that have helped me keep afloat financially throughout my adult life. I’m hoping that sharing some of my strategies will start the conversation so we can help each other secure our financial futures.

Review your spending:

Most online banking systems these days have easy tools to get an overview of your spending habits. I take a look at my spending regularly to identify if there’s a category of item I’m spending my money on that could be addressed. Eating out is an example I found. $10 for lunch doesn’t seem too bad, but when you’re spending that 5 days a week, the money adds up. From there I will do a deeper dive by looking at specific transactions. Take out the essentials and look at where the rest of the money went over the past month/year. The important thing is to take action to adjust.

Set Up Automatic Withdrawals:

Most banks will be able to set up your main account to shift a predetermined amount of money over to a savings account automatically each month. This is a great option because it forces me to save a steady amount of money each month without requiring me to take any manual steps. Don’t be scared of this option if you don’t have a lot of money to spare each month. I started my automatic withdrawal at $5, and raised it up as I became more comfortable. $5 x 12 months is still $60 saved! and keep in mind, the money is simply in another account, so you can easily transfer it back at any time. Meaning there is no risk to this strategy.

Give Yourself a Buffer at the Bottom of Your Account:

A long time ago I decided to consider $100 dollars in my account the lowest I would go, rather than letting $0 be the ‘bottom’ of my account. Any time I went below $100, I would have to do what I could to stop spending until I was back above the point I consider my account as ’empty’. To this day I consider myself in the negative until I get back above that $100 dollar mark. Might seem a little strange at first, but it helps break the habit of going into the negative in your account, and having to owe money to the bank. It can help you recognize if you should be in a saving or spending pattern.

Consider Your Long Term Goal

The future is a hard thing to predict, but is there something you would like to buy in the coming years? A vacation you would like to go on? A financial point you would like to be at? Now break down a rough estimate of the cost that goal would require. Do a quick calculation of the monthly savings required to reach that goal (always best to overestimate here, better to have more saved than you need). We all know that it takes time to save, so I try to focus long term to give myself a step ahead. It is also good to consider retirement savings (no matter where you are in your adult life). Starting to put away money for down the line is never a negative choice. I use automatic withdrawals for this as well!

Most importantly, remember that there is only so much you can control. Unexpected things happen every day that can cut into the money that you were trying to save. Don’t let that bring you down, or discourage you. The point is to simply to utilize financial strategies to help keep yourself above water, and to understand the goals/options that work best for you.

So I showed you mine, what are your tips and tricks to managing your finance? Pay it forward in the comment section below!

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Constantly nerding out over Music, Books, Movies, Tv Shows, Sports, or Video Games. All content produced are thoughts/opinions/creations that spilled out of his brain.

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