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5 Tips on How to Manage Your Finances More Efficiently

5 Tips on How to Manage Your Finances More Efficiently

In my school, I had to know how DNA is replicated and why the War of the Roses was called that – but finances, nope! Mathematics and arithmetics are fun (not really), but they did not provide me with what I really need today – and that is how to have enough money to survive from one paycheck to the next.

In this article, I presume that you have a job, or at least some sort of income, and I have a good guess that you are not good at managing your finances; well, guess what? Nobody is. Unless you are Donald Trump and you are born rich.

The rest of us, we have to make do with what we’ve got, and it usually isn’t enough. Mortgages, credits, student debt and other nasty words such as these can creep up on you when you least expect it and ruin your chances of visiting Italy this year, or the next for that matter.

Well, unless you’ve developed a great singing talent while reading my introductory paragraph, and you’re planning on making big bucks while singing country songs, prepare to read our 5 tips for making yourself more financially stable.

1. Know Your Expenses

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    This is the first, and probably the most important item here. You need to know exactly how much you and your family are bringing in, and how much is going out. This might seem like a true hassle and a lot of paperwork, but you need to know the current state of affairs.

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    It might seem obvious, but you should spend less than you earn, as that would be the perfect case scenario; then, you’re done and you can stop reading right now. If you find yourself on the negative side, no matter how impossible that might sound, a lot of people actually live like that, yes, it is somewhat stressful, but it is possible.

    Once you get to know where your money is going, and what kind of life it is living, it is also important to know terms like investing, taxes, insurance and retirement plans. Once again, nobody mentioned those things while you were in college, and somehow, they are trying to actively ruin your life. Remember: Google is your friend – if you don’t know something, google it immediately; only knowledge can help you with your financial troubles. Or rich uncles – they are also a nice solution.

    When creating a list of expenses, try to find something that looks like something you can live without. Maybe you don’t really need that gym membership, since the last time you visited, Christina Aguilera was still popular. On the other hand, maybe you can give a few dollars more on a bank account that will make all ATM withdrawals free – you never know where some hidden expenses might be unless you play this game of hide and seek.

    The most important thing here – be honest with yourself; the only person you could be lying to here is yourself (and people are quite good at that; I know I am – I’m looking at you, diet). The more honest and reasonable you are, the more rational decisions you will be able to make. Ask a friend to help you, your mother or father, unless they plan on nagging about how fiscally irresponsible you are.

    2. Learn What to Rent, and What to Buy

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      Many people do not agree about whether it is better to buy stuff or simply rent it – in the long run, that is. For example, if you are planning on renting a home, where you plan on living with your family, it is better to think about buying it permanently, via bank credit. Renting may sound like a good solution for now, but after 10 years (and trust me, time passes by quickly) you might regret only renting, when you could have paid off 70% of your home by that time.

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      On the other hand, renting a DVD might be a much better solution than buying it. I know, nobody buys DVDs anymore, but you get my point. Do not go in blindly and buy everything you need; there is probably a service that can provide you with the same result, for less money. If you’re having money issues, it’s a better idea to join the local library than buy every book you want.

      If you plan on using something for a long time, then it is better to buy – it is called cost analysis, and it sounds difficult, because it is. It involves not only money, but whether you actually need that item, and how much money that item will cost you in the future. Even though I mentioned that you should take a bank loan and buy a home, it is not a piece of advice I give out lightly.

      You should be 110% sure that you can survive such an adventure, and then decide. Think about your future mortgage and when you should start paying it off. Maintain a high credit score, which means that you cannot use your credit card like Monopoly money; only buy what you can actually afford.

      3. Play the Responsible Game – Invest

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        Now, this is something everyone needs professional help with. Finances are all around us, and they are way more complicated than we’ve ever imagined. Investing may sound like magic from a Harry Potter book and, while it might actually be quite similar, it has real-life consequences, and you should be on the winning side. The more you know about the financial instruments at your disposal, the better choices you’ll be able to make, and you’ll know when to back away.

        Investing into your 401(k) plan is also an investment, even though many people don’t consider it that way. Whenever you get your paycheck, a small portion is set aside, and after years, especially when you’re older and unable to work, you’ll have money on the side, or in case of an emergency.

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        If, on the other hand, you’re interested in stocks, there are many options that we cannot cover in an entire article itself. That is why it is better to find someone who does that sort of thing professionally, but even then be mindful of what you’re doing.

        Another type of investing can be insurance. There are many kinds of insurances. You can insure almost anything (it’s even said that Jennifer Lopez insured her behind, so there’s that fun fact). You never know when you might need a large sum of money for something unexpected. Hey, nobody likes thinking about this kind of stuff, but it is a part of life.

        Life insurance might help your family if someone unexpectedly dies, and health insurance will help you with doctors’ bills. Home insurance will help you in case of break-ins, natural disasters and what-not. Like I said, it is all dark stuff, but dark stuff happens.

        4. Always Have a Savings Account

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          Once you’ve surveyed your finances, and found some money you are willing to set aside, then it is a good idea to start a savings account.

          Choose any bank, just don’t try to hide your money under your bed. Not only will a bank give you a small interest (in this case, you are lending your money to a bank, and they are paying interest to you – and isn’t that a nice turn of event?), but it will keep your money safe and sound, and always at your disposal. Even a small monthly amount can accrue to a lot of money over a few years, and that can easily become your kid’s college or emergency fund.

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          When creating a savings account, you should always have at least 3 months’ worth of money – so that in case you suddenly lose your job, you have some time to find another without worrying about survival. Another great piece of advice here is to create a special savings account that is not connected to any credit card. This is to prevent yourself from spending that money when you do not really need it. You should not even have easy access to it. It might sound counterintuitive, but it will help you save some money.

          5. Find Additional Income

          Another great piece of advice that might seem too obvious is that you should find another job. There are many agencies that will give you an opportunity to work online as a tutor of almost anything you are good at. Do you know a bit of German or French? Why not use those skills and earn some money in the process. The Eastern markets are full of people who are more than eager to learn Western languages, so it is even possible to be an English teacher, even though you are not fully qualified.

          If you need more radical changes, you can sell off the stuff you don’t use, and make some money that way. Make a yard sale, or even better – put all the things you haven’t used in the last year on eBay, especially things like clothes and electronic appliances.

          Mind you, this won’t solve your finances, but it might help in the short run, especially if you are struggling to get your hands on some quick cash. An additional job will help you in the longer run, but it will probably ruin your personal life, but who needs that anyway.

          All joking aside, finances are no laughing matter. Money can ruin your life or make it great, so it is extremely important to always take care of it. Spend it wisely, invest it properly, and always have a small backup.

          If you are in dire need of some help, either find an additional job or ask a friend for a quick loan. Refrain from banks, but if you cannot avoid them, use their services cautiously, and always bring someone with more experience to the bank; they can help you understand the fine print and make a better decision. Good luck!

          Featured photo credit: http://getrefe.tumblr.com/ via 66.media.tumblr.com

          More by this author

          Vladimir Zivanovic

          CMO at MyCity-Web

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          Published on November 8, 2018

          How to Answer the Tough Question: What are Your Salary Requirements?

          How to Answer the Tough Question: What are Your Salary Requirements?

          After a few months of hard work and dozens of phone calls later, you finally land a job opportunity.

          But then, you’re asked about your salary requirements and your mind goes blank. So, you offer a lower salary believing this will increase your odds at getting hired.

          Unfortunately, this is the wrong approach.

          Your salary requirements can make or break your odds at getting hired. But only if you’re not prepared.

          Ask for a salary too high with no room for negotiation and your potential employer will not be able to afford you. Aim too low and employers will perceive as you offering low value. The trick is to aim as high as possible while keeping both parties feel happy.

          Of course, you can’t command a high price without bringing value.

          The good news is that learning how to be a high-value employee is possible. You have to work on the right tasks to grow in the right areas. Here are a few tactics to negotiate your salary requirements with confidence.

          1. Hack time to accomplish more than most

          Do you want to get paid well for your hard work? Of course you do. I hate to break it to you, but so do most people.

          With so much competition, this won’t be an easy task to achieve. That’s why you need to become a pro at time management.

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          Do you know how much free time you have? Not the free time during your lunch break or after you’ve finished working at your day job. Rather, the free time when you’re looking at your phone or watching your favorite TV show.

          Data from 2017 shows that Americans spend roughly 3 hours watching TV. This is time poorly spent if you’re not happy with your current lifestyle. Instead, focus on working on your goals whenever you have free time.

          For example, if your commute to/from work is 1 hour, listen to an educational Podcast. If your lunch break is 30 minutes, read for 10 to 15 minutes. And if you have a busy life with only 30–60 minutes to spare after work, use this time to work on your personal goals.

          Create a morning routine that will set you up for success every day. Start waking up 1 to 2 hours earlier to have more time to work on your most important tasks. Use tools like ATracker to break down which activities you’re spending the most time in.

          It won’t be easy to analyze your entire day, so set boundaries. For example, if you have 4 hours of free time each day, spend at least 2 of these hours working on important tasks.

          2. Set your own boundaries

          Having a successful career isn’t always about the money. According to Gallup, about 70% of employees aren’t satisfied with their current jobs.[1]

          Earning more money isn’t a bad thing, but choosing a higher salary over the traits that are the most important to you is. For example, if you enjoy spending time with your family, reject job offers requiring a lot of travel.

          Here are some important traits to consider:

          • Work and life balance – The last thing you’d want is a job that forces you to work 60+ hours each week. Unless this is the type of environment you’d want. Understand how your potential employer emphasizes work/life balance.
          • Self-development opportunities – Having the option to grow within your company is important. Once you learn how to do your tasks well, you’ll start becoming less engaged. Choose a company that encourages employee growth.
          • Company culture – The stereotypical cubicle job where one feels miserable doesn’t have to be your fate. Not all companies are equal in culture. Take, for example, Google, who invests heavily in keeping their employees happy.[2]

          These are some of the most important traits to look for in a company, but there are others. Make it your mission to rank which traits are important to you. This way you’ll stop applying to the wrong companies and stay focused on what matters to you more.

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          3. Continuously invest in yourself

          Investing in yourself is the best investment you can make. Cliche I know, but true nonetheless.

          You’ll grow as a person and gain confidence with the value you’ll be able to bring to others. Investing in yourself doesn’t have to be expensive. For example, you can read books to expand your knowledge in different fields.

          Don’t get stuck into the habit of reading without a purpose. Instead, choose books that will help you expand in a field you’re looking to grow. At the same time, don’t limit yourself to reading books in one subject–create a healthy balance.

          Podcasts are also a great medium to learn new subjects from experts in different fields. The best part is they’re free and you can consume them on your commute to/from work.

          Paid education makes sense if you have little to no debt. If you decide to go back to school, be sure to apply for scholarships and grants to have the least amount of debt. Regardless of which route you take to make it a habit to grow every day.

          It won’t be easy, but this will work to your advantage. Most people won’t spend most of their free time investing in themselves. This will allow you to grow faster than most, and stand out from your competition.

          4. Document the value you bring

          Resumes are a common way companies filter employees through the hiring process. Here’s the big secret: It’s not the only way you can showcase your skills.

          To request for a higher salary than most, you have to do what most are unwilling to do. Since you’re already investing in yourself, make it a habit to showcase your skills online.

          A great way to do this is to create your own website. Pick your first and last name as your domain name. If this domain is already taken, get creative and choose one that makes sense.

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          Here are some ideas:

          • joesmith.com
          • joeasmith.com
          • joesmithprojects.com

          Nowadays, building a website is easy. Once you have your website setup, begin producing content. For example, if you a developer you can post the applications you’re building.

          During your interviews, you’ll have an online reference to showcase your accomplishments. You can use your accomplishments to justify your salary requirements. Since most people don’t do this, you’ll have a higher chance of employers accepting your offer

          5. Hide your salary requirements

          Avoid giving you salary requirements early in the interview process.

          But if you get asked early, deflect this question in a non-defensive manner. Explain to the employer that you’d like to understand your role better first. They’ll most likely agree with you; but if they don’t, give them a range.

          The truth is great employers are more concerned about your skills and the value you bring to the company. They understand that a great employee is an investment, able to earn them more than their salary.

          Remember that a job interview isn’t only for the employer, it’s also for you. If the employer is more interested in your salary requirements, this may not be a good sign. Use this question to gauge if the company you’re interviewing is worth working for.

          6. Do just enough research

          Research average salary compensation in your industry, then wing it.

          Use tools like Glassdoor to research the average salary compensation for your industry. Then leverage LinkedIn’s company data that’s provided with its Pro membership. You can view a company’s employee growth and the total number of job openings.

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          Use this information to make informed decisions when deciding on your salary requirements. But don’t limit yourself to the average salary range. Companies will usually pay you more for the value you have.

          Big companies will often pay more than smaller ones.[3] Whatever your desired salary amount is, always ask for a higher amount. Employers will often reject your initial offer. In fact, offer a salary range that’ll give you and your employer enough room to negotiate.

          7. Get compensated by your value

          Asking for the salary you deserve is an art. On one end, you have to constantly invest in yourself to offer massive value. But this isn’t enough. You also have to become a great negotiator.

          Imagine requesting a high salary and because you bring a lot of value, employers are willing to pay you this. Wouldn’t this be amazing?

          Most settle for average because they’re not confident with what they have to offer. Most don’t invest in themselves because they’re not dedicated enough. But not you.

          You know you deserve to get paid well, and you’re willing to put in the work. Yet, you won’t sacrifice your most important values over a higher salary.

          The bottom line

          You’ve got what it takes to succeed in your career. Invest in yourself, learn how to negotiate, and do research. The next time you’re asked about your salary requirements, you won’t fumble.

          You’ll showcase your skills with confidence and get the salary you deserve. What’s holding you back now?

          Featured photo credit: LinkedIn Sales Navigator via unsplash.com

          Reference

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