5 Essential Tips for Effective Cash Management
Effective cash management is crucial for achieving your financial goals and ensuring financial security. Properly handling your day-to-day finances can help you save more, reduce stress, and prepare for future expenses. Here are five essential tips to improve your cash management:
1. Create a Budget
Start by creating a detailed monthly budget that outlines your income and all your expenses, including fixed bills, debt, discretionary spending, true expenses, and savings/investing goals.
Programs like YNAB and Every Dollar make this easier to track.
A budget gives you a clear picture of where your money is going.
Give yourself at least a few months to get comfortable and learn how to work your budget.
2. Emergency Fund
Build an emergency fund to cover unexpected expenses.
Many "unexpected" expenses should be expected you just don't know when they will happen (new tires, home repairs, medical, birthdays, etc.).
$1,000 is a great starting spot, but aim for at least three to six months' worth of living expenses in a separate savings account.
Banks like Ally allows you to create custom and separate savings buckets.
3. Automate Savings
Set up automatic transfers to your savings or investment accounts each month.
Most jobs allow you to send your paycheck to multiple accounts or banks allow for automatic transfers to from checking to savings.
Automating your savings to ensure you consistently save money before you have a chance to spend it.
5% of your take home pay automatically to a savings account is a good place to start.
4. Track Spending
Keep track of your spending habits using apps like YNAB and Every Dollar they make this easier to track.
This will help identify areas where you can cut back and redirect funds towards your financial goals.
5. Review Regularly
Periodically review your budget and financial goals. (Every 30 days minimum)
Adjust your budget as needed to accommodate changes in income, expenses, or financial objectives.
By following these cash management tips, you'll be better equipped to handle unexpected expenses, save for your future, and make informed financial decisions.
Effective cash management sets the foundation for a more secure financial future. If you want help along the journey, reach out to our team of experienced
We have a highly experience team of financial advisors and certified financial planners (CFP's®) who can help you this journey. Meet with Wela Financial Advisory today.
*Brent Forrest & Associates, LLC dba Wela Financial Advisory( Wela) is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance. Wela may discuss and display, charts, graphs, formulas which are not intended to be used by themselves to determine which securities to buy or sell, or when to buy or sell them. Such charts and graph offer limited information and should not be used on their own to make investment decisions.
