Managing Money Matters

Managing Money Matters

By Sarah Scrafford is an industry critic, as well as a regular contributor on the subject of entrepreneurial finance. She invites your questions, comments and freelancing job inquiries at her email address: sarah.scrafford25@gmail.com

Making money is hard work, but making the money you have work wonders for you is easy if you know how. Read on to see how you can manage your money more efficiently to maximize your earnings even though you don’t earn a dollar more:

• Work out your average monthly income and expenditure, both fixed and varying and plan a budget. Include uncertain expenses while omitting uncertain income; this way, you’re prepared for unexpected emergencies and any extra income that comes in goes directly to your savings for a rainy day.
• Write down all your expenses, even the most trivial ones. You may think that the $2 you spend on a cup of coffee is not worth listing, but it adds up to a significant amount when you stop at the coffee shop every day. A list helps you take stock at the end of each month and figure out which expenses to cut down on.
• Spend money, but only on the things that help you perform more efficiently at work or products that help you move forward in your goals. If a new computer or an extra employee will simplify things at work, by all means, go ahead and buy or hire as needed. If your work necessitates a lot of travel, buy a more expensive car that will save you money on gas in the long run because of its good mileage. If you need to look sharp in all your dealings, spend money on your clothes and grooming. This money you’re spending is just an investment that will help you earn the big bucks.
• Instead of running up huge bills on your credit card, take out personal loans or use the equity on your home to tide you over in times of emergency. While both are borrowings, latter come at a much lower interest rate that will help you pay back the loans without feeling too much of a pinch.
• Instead of paying all your bills at one go, plan your payments according to their due dates. Paying a couple of days just before your bills are due will maximize your money. At the same time, you should take care to include postal holidays or weekends to the time your check takes to reach your creditor. You don’t want to be penalized for a late payment simply because you wanted to wait till the last minute to pay.
• Shop around before you apply for credit cards – be careful about hidden fees and clauses written in the fine print that charge you for just about anything.
• Don’t accumulate balances on your credit cards. Pay off the entire amount every month so that you’re not faced with the burden of paying the high interest and the principal. Remember, the higher your balance, the more interest you accrue. So every penny you pay off each month helps in bringing down the amounts you have pay in later months.
• Sometimes, renting out a home or office is better than buying one even if the former is the more costly option, especially if you’re on the move every year or so. Compare the costs in money, time and effort involved in buying and selling property regularly and in renting before you make your decision.
• Do not take cash advances on your credit card – they’re the worst in terms of interest charged.
• If your job permits, try working out of home to save on conveyance and rent.
• Any money that you manage to save, invest wisely in bonds or stocks that provide a reasonable return without too much of a risk.
• Make sure you don’t fall prey to identity thieves and online hackers. Keep your personal information confidential and check your bills and accounts regularly for discrepancies. Report any anomaly immediately so that no further misuse is possible.
• Make do with a landline (or VoIP connection) instead of spending money on cell phones.
• Do not lend anyone money, but if you do, ensure that you’re paid back.