To maintain the goodness of life, in addition to equipping ourselves with a suitable career path and lifestyle, we also need to have personal management skills. In those personal management skills, personal finance management skill is one of the most challenging skills as not everyone is good at financial management. Although that is the case, you can always equip yourself with more helpful knowledge and tips to enhance your skills.
If you are looking for an effectively money management solution, check out the article below to avoid getting into some common mistakes that might happen.
Why do you have to manage your personal finance?
Personal finance management can be simply understood as applying financial principles to your personal or family’s finance management. Personal finance can be related to several areas, such as: monthly income, personal expenses, savings, investment, etc. You can also look at personal finance management as the way you manage to use your money the most effectively.
So why is personal finance management important? This is because you will be more likely to have financial freedom once you start managing your personal finance. Once you have your financial freedom, you will be more likely to effectively invest yourself in more important priorities.
3 common mistakes you might be making in money management
To manage your personal finance effectively, make sure you do not follow the below mistakes.
1 – Do not manage daily expenses
One thing you need to do before being able to manage your money effectively is managing your expenses. If you don’t know where your money goes or how you spend it, you won’t be able to be in control of your money nor know what habits you can change in order to manage your money better.
2 – Do not have a savings amount
Any of us would agree that spending money is always easier than saving money. This is also the problem that a lot of people encounter in money management as savings is a challenging task if you are not patient and determined enough. If you think that you should only save what is left from the money you were going to spend, you probably will not have a solid savings amount to cope with unexpected situations in the future.
This is why it is important that you should save a certain amount of income every month. This helps you to be proactive in unexpected situations and issues such as illness, unemployment, starting a business, repair an important equipment/device, etc.
3 – Give up on money management
Not only money management but any task would require patience and determination. Managing money is a long term task that requires monitoring and adjusting your spending habits accordingly. The process of monitoring will help you to accurately choose the suitable money management method for yourself. Hence, it would be a waste if you decide to give up on money management in the early days when you don’t see any immediate results.
To motivate yourself in the process of money management, find yourself a friend, a family member or even a mobile application that helps you with money management. For instance, the Timo app offers several smart features to help you manage your personal finance more effectively, such as:
– Transaction history in the Spend Account section – the place that stores all the transactions you have made from your Spend Account or your Timo card
…and many other smart features that can help you manage your money more effectively. Find out more here.