Money Management: 4 Tips for Mastering Your Finances

 

What is money management, exactly? It’s a plan for your money so you can make the most of it. This plan typically involves budgeting and saving money, avoiding or reducing debt and investing in your future.

If learning how to manage your money sounds intimidating or stressful, take it one step at a time. Below are money management tips to help you gain control and, more importantly, peace of mind.

How to manage your money

1. Take inventory of your finances

Money management is about more than making the math work out. It’s about adjusting your mindset, too.

Take a mental inventory of your current position.

Are you consistently overspending?

Do you have enough saved up to survive an unexpected expense?

Do you live paycheck to paycheck?

Do you feel overwhelmed by financial jargon?

Be honest with yourself about where your weaknesses lie. You might’ve made some missteps in the past, but you don’t have to continue on that path. Here’s how to manage your money now, while preparing for the future.

2. Build a money management blueprint

How do you put your plan in action?

Use the steps below to build a blueprint that works for your finances.

 

Start with a budget

If you’re not sure how to budget, start by choosing a system that you’ll stick with. We like the 50/30/20 budget plan, which allocates 50% of your income for needs, 30% for wants and 20% for savings and debt repayment. This 50/30/20 budget calculator divides your income into these categories.

If the 50/30/20 rules don’t work for you, there are plenty of other types of budgets to choose from. You may also find that a free budget app helps you stay on top of your finances.

Track your spending

By tracking expenses, you can see exactly where your money is going. It may inspire you to stop spending so much in a certain category or adjust your spending habits so they better align with your goals.

Find ways to save

As you pay more attention to your finances, you’ll likely find opportunities to save. Here’s how to save money, from tweaking daily habits, to negotiating bills, to making long-term changes.

Ideally, over time, saving money will become part of your lifestyle. If you want to learn more about saving money with coupons, freebies and DIY hacks, check out our guide to frugal living.

Use designated accounts for spending and savings

One way to make money management easier is to keep money designated for bills and budgeted expenses separate from your emergency fund. This will reduce the temptation to dip into it for nonemergencies. Saving for a house, vacation or new car? Stash those funds in separate accounts so you can see progress toward each goal.

Make a plan to pay off debt

A strategic approach to debt repayment will help you reach the debt-free finish line faster. We recommend tackling your most expensive debt — the accounts with the highest interest rates — first, while making minimum payments on the rest. Then, work your way down through any lower-interest rate debt until it is all paid off.

» Here are tools and tips to help you pay off debt

Develop good credit habits

Your credit can determine whether you’re able to get loans and the rates you pay on them, as well as many other aspects of your financial life. A credit check may be part of getting a cell phone plan, apartment or car insurance.

To stay on top of your score, focus on the two biggest factors that influence it: payment history and credit utilization (how much of your credit limits you’re using). Aim to pay everything on time, because just one missed payment can hurt your score, and use less than 30% of your credit limits on each card and overall.

» Learn what a good credit score is and how to get one

Invest in your financial future

Set money aside now, in a 401(k) or IRA, and let compound interest work its magic. The ultimate goal is long-term financial freedom and stability. Not sure how much you need to save? Try our retirement calculator.

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3. Make the most of your savings

Money management goes beyond spending less than you make. A true sign of financial prowess is saving enough to live comfortably in the long term as well as the short term.

You can achieve this in four steps:

Piggy bank

Save

Start socking away extra money to build an emergency fund. Ideally, you should have six months’ worth of living expenses at your disposal in case the unthinkable happens. If that seems too ambitious, start small. A $500 reserve is a great first goal.

 

Investment portfolio icon

Invest

Invest extra money for your future. Set yourself up for retirement by contributing to a 401(k). If your company offers a match, contribute enough to get the maximum.

 

Pay off debt

Whether it’s a loan or a looming credit card bill, you probably have some debt obligations. Always make at least the minimum monthly payments so you don’t suffer credit score damage due to a late payment. If you have extra money for bills, pay down the high-interest debt first.

 Repeat

Keep building up that emergency fund, investing for retirement and knocking down debt.

 

 

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4. Be persistent

Despite their good intentions, many people fall off the financial bandwagon. Sticking to a budget that’s too restrictive can be suffocating. Navigating investment jargon can be confusing. But don’t get discouraged.

You didn’t get in the financial position you’re in overnight, and you won’t get out of it overnight, either. Give yourself time to learn and grow. With hard work and dedication, you can manage your money with confidence.

The Ultimate Shopping Guide: 8 Proven Ways to Get the Best Deals Online

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Online shopping has become a routine part of life. With a few clicks or taps, you can buy virtually anything. But before you restock on toilet paper or purchase those trendy sneakers from the ad in your Instagram feed, make sure you’re not spending more than you have to.

Here’s how to shop smart and find the best prices online.

1. Set a budget and make a shopping list

You likely already plan for big expenses, such as vacations, weddings or college tuition. Planning out everyday purchases is just as important. Making a budget that accounts for clothing, gifts, groceries and other expenses will help you figure out how much you can afford to spend — and avoid debt. The 50/30/20 budget is one template you can use to split your monthly income between the things you need and nonessentials.

With a budget in mind, be more intentional about what you buy. Write a list of the items you aim to purchase before you start shopping to avoid impulse buying. Sticking to the items on the list will prevent impulse buying and make it easier to follow your budget.

2. Shop at the right time

Did you know you can usually pay less for a TV in February than in March? There’s a best time of the year to buy almost anything, including pencils, bedding, appliances, furniture and more. Look for steep discounts during end-of-season sales and major shopping holidays. Here’s the rundown on a few big events:

Back-to-school sales

Late summer brings savings on classroom and office supplies, outfits, computers and more. Several states also participate in sales-tax holidays in or around August, waiving the sales taxes on certain back-to-school items.

Labor Day sales

Labor Day events in September are best known for mattress discounts. But shoppers can also find some of the year’s lowest prices on home furnishings, appliances and summer inventory.

Black Friday deals

You don’t have to sacrifice Thanksgiving dinner to get a stellar deal. Retailers release Black Friday ads (and even discounts) as early as October. Plus, many offer the same deals in stores and online. Sales roll into Cyber Monday events the week following Black Friday and beyond. You’ll typically find the top deals in product categories such as personal electronics and small kitchen appliances.

Superstores like Target and Walmart hog the Black Friday spotlight, but drugstores, wholesale clubs and other businesses get in on the action, too. Check your mailbox, inbox and retailer websites for announcements, so you can plan when and where to shop.

3. Apply coupons

Knowing the basics of how to coupon can help you save on purchases from grocery stores and other retailers. Try a free coupon app, or build the habit of searching for coupon codes every time you shop. Spending a minute or two on aggregator sites could get you $1 off that shampoo on your list or free shipping on an order.

4. Compare (and match) prices

Different retailers sometimes sell identical products at nonidentical prices, so it pays to do a little research. Before buying an item, scope out a few sites. But sticker prices can be deceiving; be sure to include details like shipping costs and coupons in your comparisons.

Look into price-matching policies, too. Companies like Best Buy and Target may match a lower price found on a competitor’s site. Some will even give you a partial refund if you spot a price drop soon after purchasing an item. You can call a retailer’s customer service number or use its online chat feature to request an adjustment.

» MORE: NerdWallet’s guide to personal finance

5. Use shopping tools and apps

If keeping up with money-saving strategies makes shopping feel like a homework assignment, try automating the work. Popular browser extensions and apps, such as Honey and Rakuten, can locate coupons, track prices and more — so you don’t have to.

6. Buy online, pick up in store

You can shop online and get your order the same day (possibly at a discount) without paying shipping costs. The catch: You have to make a trip to the store to fetch it. But curbside and in-store pickup options can be worth the minor inconvenience, especially when you consider the money you’ll save by spending less time near tempting displays.

7. Get rewards

You can earn money, points or other benefits — often on top of regular discounts — through rewards credit cards, retailer loyalty programs and cash-back apps. But don’t let the promise of a reward encourage you to buy things you don’t need.

8. Score free stuff

Discounts are great and all, but you can get freebies online too, such as gift cards. Before you buy a new coffee table, why not browse Craigslist for a free one? Learn how to get free stuff from community marketplaces, libraries and more.

How To Make Millions By Playing Games On Twitch

Twitch is the go-to platform for gamers, with more than 4 million broadcasters each month and 17.5 million average daily users, all playing or watching other people play video games. It’s also the destination for gamers hoping to turn their hobby into a little extra cash and make money without a traditional job.

Some broadcasters earn seven figures per year, thanks to subscriptions, sponsorships and a share of ad revenue, among other things. Granted, they typically have tens of thousands of followers and spend hours each day broadcasting, gaming and hosting other games on their channel.

But you don’t need to be an elite user to cash in on the site. Here’s how to build your audience and start making money on Twitch.

Building a Twitch audience

You can’t attract an audience on any online platform overnight. It’s the same with Twitch.

“Successful channels — like companies — are built up over years, not over days or weeks,” says Jordan Slavik, an avid gamer who has advised Twitch broadcasters on building a following. “The most important thing is to keep producing materials.”

You might make a little money here and there at first, but don’t expect a steady income until you’ve put in a lot of work. Find your niche, whether it’s a game, genre or shtick — if you’re not the most skilled player, for example, be the funniest. Set a regular streaming schedule so fans know when to tune in. Use your existing social media accounts — Twitter, YouTube, Facebook, Instagram, etc. — to promote your Twitch broadcasts. And support other Twitch users by watching and engaging with their streams.

Your marketing and networking skills are almost as important as your gaming skills, Slavik says.

Once you attract viewers, interact with them. Ask questions. Crack jokes. Respond to chats. An entertaining broadcaster gets fans to tune in stream after stream.

Track all the money you make

See the ins and outs of your cash, cards and bank accounts at a glance.

How to make money as a novice

When your audience grows, so does your potential to earn money. But there are a few ways you can cash in as you’re still growing your following:

Donations

Twitch users like to support their own. One of the main ways they do this is by donating money to their favorite streamers. Add a “donate” button to your channel — via PayPal or a third-party app, such as Streamlabs — and let viewers show you the money.

Brand partnerships

Companies use Twitch streamers to get their products in front of people, and the streamers get a kickback in return. This is typically referred to as a partner or affiliate relationship (not to be confused with Twitch’s partner and affiliate programs, more on that later).

Affiliate opportunities for Twitch streamers can come from companies that sell hardware and software, energy drinks and accessories, such as headsets and chairs. Commissions vary, but for example, Razer — the hardware and software company — offers affiliates up to 20% commission on the sale of its products.

Brands don’t typically come to you unless you’re a big-time gamer. Talk with other streamers to suss out affiliate opportunities.

Merchandise

If you have a dedicated audience, consider selling your own merchandise — think t-shirts, stickers, coffee mugs and laptop cases — via a third-party site such as TeePublic or Spreadshop. Just create a storefront, stock it with items — bearing your own design or curated from other sources — and promote it on your Twitch channel.

How to make money as a Twitch Affiliate

Streamers who meet a specific set of criteria can become a Twitch Affiliate. The program is invitation-only, and you must have met the following milestones within the past 30 days to be eligible, according to Twitch:

A minimum of 500 total minutes broadcasted.

A minimum of seven different broadcast days.

An average of three concurrent viewers or more.

At least 50 followers.

Joining the program comes with additional ways to earn money on Twitch:

Subscriptions

Viewers can subscribe to your channel to unlock perks, such as exclusive chat rooms, emoticons and merchandise discounts. Monthly subscriptions start at $4.99, with $9.99 and $24.99 options available. Affiliates receive a cut of each subscription.

Virtual cheers

Another way viewers lend monetary support is via virtual cheers, called “bits.” Viewers buy bits — which come in different colors and sizes — from the chat window, according to Chase, Twitch’s former director of public relations, who goes by only his first name. The price starts at $1.40 for 100 bits. Viewers then dole them out to their favorite broadcasters, who receive a cut — 1 cent for every bit used in their chat.

Game sales

Say you’re streaming yourself playing Warframe. Viewers can purchase the game and in-game add-ons directly from your channel using a “buy now” button. This button automatically appears whenever you play games sold in the Twitch store. Affiliates receive a 5% share of purchases that originate from their channel.

How to make money as a Twitch Partner

Partner status is the top tier for Twitch earners. Unlike Twitch Affiliates, who are automatically invited to join the program, users must apply to become partners.

Twitch Partners earn money the same way as affiliates and general users, but they also receive a share of ad revenue generated from their page. Partners are also likely to get endorsement deals and brand sponsorships.