10 reasons why managing your money effectively is important

1. 10 reasons why managing your
money effectively is important

2. 1
 When you manage your money effectively you are
better able to save for the future. This means as well
as ensuring you can manage right now, money
management means you are able to save for future
events such as a holiday.
 Savings are a key part in money management as they
help to build in a level of security for the future also.
Savings could pay for an unexpected pay or expense
which could not be repaid using normal wages were
the expense is greater.
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3.  Without effective money management on a monthly
basis it can be easy to keep spending unaware of the
amount which has really been spent. Money
management can therefore aid in avoiding over
spending. Take for example online banking, this give a
quick and easy view of where our money is going and
therefore makes it far easier to understand exactly
what is left.
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4.  Money management can help use reduce our monthly
costs. Quite often as consumers we are overcharged
but choose to ignore it. By sitting down and reviewing
the costs of each of our expenses we may be able to
save money, take for example car insurance. By
taking the time to compare the costs charged by
lenders, there is every possibility money can be saved.
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5.  If we budget and manage our wages we are better
able to use our spare income wisely. This means if we
are fully aware of what has to be repaid before we
worry about what we would like to buy and do, it is
far less likely an important bill will go un-noticed. An
easy and effective way to do this is simply by
completely a monthly budget listing all the usual
costs and then ticking them off as they are paid, this
will make the amount which is spare very clear.
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6.  Another tip for money management is to ensure
wherever possible all bills and monthly payments are
made on the same day of the month. This means after
your pay day you can be sure the amount left is truly
spare. This can be important as it means the
important elements of your budget are being paid
first and foremost.
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7.  Another reason why money management is so
important is because it can help ensure we are not
paying un-necessary charges as a result of late
repayments. Remember a lot of finance providers will
charge a flat fee is their repayment is not made on
time and this can be avoided by ensuring the required
funds are available. Remember over time the amount
you save in charges could soon add up.
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8.  Management of money can also mean looking at the
bigger picture and turning this knowledge into money
saved. Take for example overdrafts versus savings.
Many consumers use their overdraft on a monthly
basis whilst having savings sitting in a separate
account. Although saving accounts do earn money,
quite often the fees associated with overdrafts add
up to a higher amount. Why not move money from
your savings to your current account and avoid the
fees payable for overdrafts. In the long term this will
gain you more money.
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9.  Effective money management can bring a certain
level of calm and a feeling of peace of mind.
Understanding your costs and the amount you have
spare means you are better able to tackle new
financial demands more clearly and with the
reassurance you have the tools to do so if required.
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10.  Managing your money effectively can also mean you
are better able to make use of your spare time.
Whether this is time spent with the family or friends
having a clear budget means you can plan fun days
out or a take away save in the knowledge the money
is available to do so.
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11.  Crucially money management can help avoid your
finances spiralling out of control. It is easy to find
yourself in debt if you are not sure where all your
income is going on a monthly basis.
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