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October 4, 2013

Managing your money in a consumption driven-world

Fri Oct 04, 2013

Your money is a huge part of your life. It can determine what you can or cannot do and where you can or cannot go. Learning how to manage your money the right way is an important step toward taking control of your life.{{more}}

Establishing a budget and sticking to it isn’t easy, but it’s the best way to be in control of your finances and make sure your money is going towards the expenses that matters most for your survival and development.

Here are some tips for good money management

1. Create your budget.

a. Think of your budget as a “spending plan,” a way to be aware of how much money you have, where it needs to go, and how much, if any, is left over.

b. Your budget should meet your “needs” first, then the “wants” that you can afford.

c. Your expenses should be less than or equal to your total income.

d. If your income is not enough to cover your expenses, adjust your budget (and your spending!) by deciding which expenses can be reduced or left out at this time.

2. Pay yourself first!

a. Saving is a very important part of protecting yourself, financially.

b. Save as much as you can every month. Even a small amount can make a big difference if you keep it up.

c. A great goal is to establish an emergency savings fund large enough to cover three to six months of your living expenses depending on your salary; this may take time to build up.

d. After you have an emergency fund, your savings can go towards meeting your goals.

e. Remember let saving be a part of your expenses.

3. Check back periodically.

a. Be sure to review your budget regularly. Ask yourself the question-:

b. Does the plan still meet your needs and help you achieve your goals? If not, make some adjustments or create a new budget that better meets your needs. You may even shift the deadline to achieve some goals.

c. If you can’t afford it save towards it.

d. Remember to treat savings as a part of your expenses. Save something every pay day!

As a guide: Commitment (Mortgage/Rent/Water/Light etc.) should not be more than 40-45% of your income.

Submitted by Teachers Cooperative Credit Union
For Financial Information Month 2013