Simple money management skills

We all need money to survive. Money drives everything and with the right type of money management skills you won't get into debt and you won't have problems financially. In order to help you understand how to manage your money properly, here are some easy tips to follow.

Know Your Earnings
In order to understand how much money you can invest, you have to know how much money you have coming in. Find out how much money you have coming in with all the various resources you have including your dividends. Once you know where all the money is coming from, you can calculate where your money is going and how you can place more toward your investments.

The best way to determine how much money you are spending is by keeping a check register and a listing of all the money and where it is going. This way you can start to cut back on unnecessary expenses like too much money towards groceries, paying too much for entertainment, etc.If you can see where you are wasting money, it will be much easier for you to control your spending and to start putting the extra money towards your retirement and your future.

The one thing to remember is that your earnings and your spending can fluctuate month-to-month. Salesmen may have a slow month and they only earn their base pay but the next month they earn a lot more. Just know what your average is and try to keep to that level. You may also need to compensate for additional expenses that will arise like paying money toward car registration and maintenance costs. Always have a yearly expense tracker so you know where your money is going so you can track it properly.

Auto Withdraw
A number of investment accounts allow you to set up automatic withdraw from your paycheck to your retirement account. If you don't have this feature, you can still set up automatic withdraw from your bank account to your retirement account.By setting up auto withdraw and having this be one of the first things that is pulled out of the account, you won't be tempted to spend the extra money that should be put toward your retirement.

Pay off Debt
In order to get money to pay toward your retirement, you need to focus on getting out of debt. One in eight American households owe $8,000 or more on a credit card. Although media reports constantly try to scare you about wild numbers saying half of the country is in debt, it is not true. MSN Money has found that while most Americans have debt of some form,it is not usually as high as those in bad credit situations. Even if you only have $2,000 in credit card debt, you still need to focus on paying it off as soon as possible. The longer you stay in debt, the more money you will put toward interest. The money that goes to interest really should go towards your retirement account instead. Placing $50 a month toward your retirement totals out to be $12,000 over twenty years. While it may not seem like a huge number, adding that to the investment total and the interest costs, that $12,000 can easily turn into $45,000 or more.

There are several approaches to paying off debt. Some people like to attack the smaller debts first as it gives them a sense of accomplishment. Others like to pay off the debt with the highest interest rate so they end up saving more money as they aren't paying as much toward interest. Pick a strategy you can afford and stick to it and get yourself out of debt.