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Complete Your Money Management Plan in 6 Easy Steps

Complete Your Money Management Plan in 6 Easy Steps

Managing your money can be a real pain in the rear end. If you’re in debt, then you probably have people calling you or sending you mail to remind you of your debt every month. Then you have food, bills like insurance and phone, and all sorts of other stuff. How do you keep track of it all? You can start with this simple money management plan to get you going.

1. Figure out your bills

A surprisingly large number of people have no idea exactly how much they fork out every month in bills, rent or mortgage (as applicable), and all of the other monthly payments you make to various places for various things. The first step to any feasible money management plan is to sit down and figure out what you spend. Once you have an idea of how much you spend every month, you have a better idea of what you need to stay afloat.

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2. Create a debt elimination plan

money management

    Being in debt sucks and it should be your number one priority to figure out how to eliminate as much of it as possible as quickly as possible. Debt is not only dragging down your credit, but it’s also negatively affecting your credit, your debt-to-income ratio, and it’s less money in your pocket every month. You should make a plan to pay off your debt. If you’re already making monthly payments, try to pay more every month if you can afford it. If you have debts that you don’t pay on, you should call those companies to either arrange settlements or begin monthly payments. The sooner you start, the sooner you get it over with.

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    3. Develop a budget

    Now that you have an idea of what you spend every month and how you plan to get rid of debt, it’s time to set up a budget. On a budget you can better manage your money, put some money away for a rainy day, and more effectively eliminate your debt. Budgets can be hard to stick to but a fun trick I’ve always used is to have an entertainment budget line every month, where you can splurge on things like eating out or attending fun events. If you don’t budget, you may overspend one month and all of a sudden you’re behind on your bills and you have to start over again from scratch.

    4. Improve your credit

    There are ways to get credit cards even if your credit is pretty bad. They’re not the most desirable credit cards, but hey, welcome to having fair to poor credit! Use the credit cards to build your credit. Don’t overspend and don’t get into more debt, but improving your credit is important if you ever want to do something like buy a house or a car again. Talk to your bank to see what they offer in terms of credit cards and credit-building opportunities.

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    5. Create an investment plan

    This is going to be the toughest one for a lot of folks because this is something many people never do. The idea of investing your money is that it grows over time. If you invest well, you essentially give yourself free money. If you don’t know anything about investment, now is the perfect time to learn. You can call various investment firms, search the internet, or maybe even take a class to learn how to properly invest your money. Once you learn how it’s done, find a way to do it and then do it. Investing may not sound like the best idea now but in 10 or 20 years, you could reap the benefits of your labor.

    6. Track your net worth

    This sounds difficult but it’s actually quite easy. Here’s what you do. You take everything you have in terms of assets, cash, and properties and add up all of the value. Then, take all of your debts (including your credit card balance) and subtract them from the value. The result is your net worth. You can become rich without actually having a lot of money. For instance, you may have $100 in your savings account but drive a $5,000 car. That means your net worth is $5,100. Once you perform the prior five steps, you should calculate your net worth every month to see if it’s trending up or trending down. If you’re doing it right, it should be trending up. From there you can create goals and work toward making yourself well off.

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    It may seem like these six steps are easy to follow, and they are. However, it does take a certain level of discipline and that’s where people have problems. You can create all of the money management plans you want but if you don’t have the self-control to follow through, then it’s all going to be totally useless.

    Featured photo credit: Rap Fix via rapfix.mtv.com

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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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