Manage Money Better

Improve your money smarts with small changes that lead to big gains.

6 Personal Money Management Tips
that Financially Successful People Follow

by Julie Jaggernath 

When it comes to personal money management, have you ever wondered why some people are so successful with their money? What do they do that you don’t do? Like many things in life, financial success comes from building up good habits. We walk before we run, print before we write, spend countless days learning from classes and books before achieving an educational goal, and work our way up with our jobs and careers. The same is true of our money. We start by dropping nickels and dimes into a jar, inch towards saving a nest egg, and come up with one payment after another to pay our bills.

Whether we use budgeting apps, Excel spreadsheets, or other software and services to help us, achieving financial success ultimately comes down to those countless tiny steps and sound money habits. If you’re curious what they are, here are 6+ tips to implement them that you can start using right now:

1. Have an “Almost Needed” Shopping List

Part of staying organized with effective personal financial management is keeping on top of what you need to run your household. From groceries to toiletries, lightbulbs, printer ink, or gas for the lawnmower, running out at the last minute to grab what you need adds up and can cause you to buy additional items impulsively. This is where in addition to your regular shopping list, an “almost needed” list is useful.

Keep an eye on your “almost needed” list as you do your shopping at stores with enough selection to make wise choices. If you find an item on sale, pick it up and store it for use later. There are countless apps available for creating shopping lists, or a small notebook works too. It can sometimes even help to segment your lists by the type of store you need to visit to pick up what you need. This works for groceries, home supplies, big box items, or even the butcher and farmer’s markets.

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Personal Money Management Tips Successful People Follow

2. Avoid Waste in Your Spending

Waste comes in many forms and sabotages good personal money management. Financially successful people do whatever they can to eliminate it from all aspects of their lives. They’re frugal, not cheap, and make wise spending choices. Instead of constantly buying a pair of poor-quality shoes that only last a year every time, they buy one pair of good quality shoes that lasts several years. They choose to cook and eat at home, rather than order in too often and let their groceries spoil. When they leave a room, they shut off the lights. If they’ve stopped going to the gym, they cancel their membership. When appropriate, they avoid idling endlessly in rush hour traffic. They pay off high interest credit card bills and steer clear from debt that they’ll have to pay interest or fees on.

Look for ways to avoid wasting time, money, and resources in your daily choices. Keep your lifestyle below your income level and don’t worry about what others think. This approach has even worked well for Warren Buffett, a successful businessman known for his frugal lifestyle. Despite being one of the world’s richest people, he still lives in the same modest house he bought decades ago and in which he raised his family. He drives an older car and isn’t known for upgrading his cell phone every two years. He’s recognized for only one significant splurge — a private jet — to which he’s quick to explain that what it costs him in capital, it saves him in time.

3. Review Your Personal Routines

Managing your routines is an important part of personal finance. Much like reviewing your subscriptions, bills, or contracts each year to ensure they meet your ongoing needs, take the time to analyze how you go about your day. For instance, one of the most expensive appliances in your home is your dryer. Could you run it less often by doing your laundry sooner so that it has time to hang dry instead? Do you buy bags of ice cubes rather than make your own? Maybe you drive the long way to work so that you can grab a coffee, rather than making it at home first and driving the shorter route. Are you someone who pays the deposit on beverage containers but doesn’t take them in to collect your refund?

It can help to analyze only one routine in your life at a time because one will likely affect another. Also try to include everyone in your household as you look for ways to do things more efficiently. Avoid implementing too many changes all at once because it will make following through with anything new that much harder.

4. Focus on Long-Term Financial Success

Rather than looking for short-cuts with instant results, finding financial success takes diligent effort with a long-term outlook. As famous football coach Vincent Lombardi once stated, “the only place success comes before work is in the dictionary.” Achieving financial success means increasing your level of financial literacy, investing in job-related education, and developing the skills to advance in your career. It means staying on top of your budget by tracking your spending periodically, saying “no” to yourself when you’d rather spend than make an extra credit card payment, and being vigilant when an offer sounds too good to be true.

There are no short-cuts for becoming a savvy money manager because what works for one person might not work for another. Go easy on yourself as you work on developing new habits that help you reach your goals. When you’re trying to implement daily changes, it can help to note your successes on a calendar, whether that’s physical or online. On each day you do that one specific thing (e.g. make your morning coffee at home), make a prominent mark on your calendar. Soon enough, you’ll have a streak that you won’t want to break. It won’t be long before your hard work has turned into a new habit!

5. Automate Personal Finance Habits

One of the best ways to manage your money is to have it manage itself. After all, thinking about everything you need to do all the time can be exhausting. This can lead to mental fatigue and by extension, poorer decision-making. Automating part of that work might mean something as straightforward as a programable thermostat and timers for lights in your home. It could mean setting up pre-authorized payments for all of your bills through your online banking system. Also set savings up to be transferred out of your chequing account the day you get paid. For financial commitments that don’t occur on a regular schedule, create calendar alerts for yourself so that you don’t have to worry about forgetting. Create a realistic budget with a paycheque plan and look for ways to put what you do regularly on autopilot. This will leave you with more time and energy to spend on making a life, not just a living.

6. Set Goals in a Way that Motivates You

Thinking about a personal financial goal can be great inspiration and will give you direction. But inspiration alone won’t help you achieve success – you also need motivation. Your motivation, however, will wane if you don’t shift your focus away from the big picture and onto the small, doable steps that will help you reach your goal. This is one of the key secrets behind the money habits of successful people. They focus on the actionable steps — what they can do today, tomorrow, and next week. They set interim goals to measure their progress. And while they keep their overall goal in mind, that’s not where they expend most of their energy. To an outsider, this may look like someone working paycheque to paycheque with little to spare. Yet nothing could be further from the truth.

It takes daily effort to make choices that enable you to reach your goals. However, a strategy of go-big-or-go-home is tough when it comes to our finances. If putting every area of your life under a magnifying glass seems daunting, look to start by saving $10 or $20 a week with minor changes to a habit or two. Once you’re successful with a series of minor changes, move on to making bigger ones. If a change is too stressful, scale it back or abandon it altogether. Don’t deprive yourself of what you enjoy most. Focus instead on what you can do to turn your wishes into goals that you can successfully achieve.

How to Make Your Goals S.M.A.R.T

How to Get Free, Confidential Help with Personal Money Management

Here’s a bonus personal money management tip: you don’t have to figure everything out alone. A non-profit credit counsellor can provide an expert second opinion on your financial situation and help you make improvements to reach your goals sooner. Whether it’s making or refining your budget, getting some guidance on complex financial subjects like credit scores, or creating a plan to get out of debt with the right tools, our accredited counsellors offer valuable guidance at no cost. Reach us by phone at 1-888-527-8999, contact us through our email address, or get tips online.

Need expert help?
Looking to get back on track?
Get started today by making an appointment to speak with one of our credit counsellors. We’re happy to answer your questions and help you. All of our appointments are free, confidential and non-judgmental.

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