If you want to invest more money (or even invest anything at all) you have to know how to manage the money you have. If you earn $3,000 a month and you spend at least that, you shouldn’t be surprised when you realise you don’t have anything left to save.
In reality it doesn’t matter how much you earn: the part of the equation that matters most is making sure your outgoings don’t outstrip your income. You have to make sure you always spend less than you earn if you want to keep some back to sink into an investment (whatever it may be).
Properly managing your money starts with budgeting. It also starts with reducing your income as much as you can. It might seem overly picky but it works well to account for every cent you spend. If you pay for everything using a credit card and then pay it off at the end of the month you can end up losing track of what you’re actually spending. This doesn’t bode well if you’re trying to free up some cash to invest in a savings vehicle of some kind.
Of course we’d all like to earn more and there are plenty of ways to do just that. However most people would find it easier to reduce their outgoings before doing anything else, so it makes sense to focus on this first.
Use budgeting tools
If you really want to manage your money well you can make use of a good budgeting tool to help you along. There are plenty of these available online or as software options, so find one that suits you and use it. It might take a while to get into the habit of using it regularly but you’ll be surprised how much information you can get from it.
Don’t make the mistake of thinking small purchases don’t count either. You’ll often find these are the easiest things to strike out of your budget – and they can add up over the course of a month as well. Think about the odd coffee here and there, not to mention a newspaper or maybe a magazine. Even the odd croissant or other treat can add up if you have enough of them over an entire month.
By budgeting and taking account of what you spend where, you can keep track of where each cent goes. This in turn highlights how you can start freeing up some additional cash to put into an investment of some kind. Even if all you do is set up a basic savings account and start putting some cash into that, it could make a world of difference to where you stand financially at the moment.
As you can see, there is a lot to focus on here but budgeting sits at the very top of your to-do list. If you really want to invest some cash, start managing your money as best you can from today onwards.