3 Simple — But Not Easy — Tips for Managing Your Money

by Miranda Marquit · 0 comments

When it comes to money management, the tips are pretty simple and straightforward. However, no matter how simple a concept may be, it’s not always easy to execute. So, while many of the best money management tips are simple, it might not be so easy to find financial success.

Here are 3 common and simple money management tips that aren’t always so easy to carry out:

1. Earn More than You Spend

The first rule of personal finance is to spend less than you earn. When you live within your means, you avoid debt while paying for the things that you need.

However, this is often easier said than done. It’s a pretty basic reality that you have to earn more money than you spend each month if you want financial success. While the concept is simple, actually translating the concept into practice is a little more difficult.

Many people have trouble living within their means due to low income, or to high expenses. It’s not so easy to live within your means when you have a minimum wage job that barely (if it even) covers the necessities of life — much less any sort of pleasure. Or, if you have an expensive medical condition or an unexpected financial catastrophe, it’s hard to keep to a budget that results in spending less than you earn.

In these cases, solutions can be hard to come by. Should you get another job or start a side gig to earn more? Can you work out a payment plan so that your obligations are more affordable? Could getting more education (and incurring even more expense) help you get a higher-paying job later?

Working out these issues is difficult, and far from easy, no matter how often someone tells you that the key to financial success is living within your means.

2. Pay Down Debt

Another piece of simple advice is to pay down debt. Get rid of debt, and you are no longer paying someone else interest, and you can use that money for something else — like investing.

Unfortunately, paying down debt is not always easy. First of all, if you have high interest debt, each payment you make sees a good chunk going to pay interest, rather than actually reducing your balance. If you only pay the minimum, reducing your debt is an exercise in futility. And, of course, where do you get the money to pay down your debt if you are already struggling with living within your means?

Once again, this simple concept is far from easy to put into practice. You will need to make a debt reduction plan, look for ways to come up with the extra money (but cutting spending, earning more money through other means, or both), and then try to stick with the plan, paying more than the minimum.

3. Invest

It sounds so simple: You should invest for your best shot of growing long-term wealth. But it’s not always easy. You have to research investments, and then try to avoid being influenced by panic when you are scared about what’s happening in the markets.

The good news is that it is often possible to make investing a little easier. By choosing index funds and using an employer’s retirement plan to invest, it’s possible to get started fairly easily. But you still have to come up with the money.

It’s possible to overcome some of the pitfalls of financial management. However, it’s not always easy — no matter how simple it sounds.

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