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Most of us aren’t really taught how to manage our money wisely in school. So  we grow up doing the same things with money we see our parents and friends  doing. In some cases, this may be a good thing if your parents or friends had  good spending habits.

Saving is an art that is learnt through patience and discipline

But for many people, their own parents or friends weren’t  taught how to handle money properly so there is a vicious cycle of handling  money improperly.

Here are 10 tips to manage your money wisely:

1. Spend less than you earn – This is the most obvious  lesson when it comes to managing our money but for some reason, most people  don’t get it. If you spend less than you earn, you will be able to save money  for your future and not have to rely on credit to get you through tough  months.

2. Operate with a monthly budget – Setting a monthly budget  is a great way to keep track of your spending and make sure you are spending  your money wisely. If you don’t know where your money is going each month, you  won’t have any idea how to get ahead with your finances.

3. Create an emergency fund – An emergency fund is money you  have set aside to use for emergency expenses that come up during the month. If  you do not have an emergency fund, you will be forced to use credit or other  savings to pay for unexpected expenses. Having an emergency fund creates a  financial safety net you can count on.

4. Pay with cash – Cash is king and I still totally believe  that. Having cash in hand can get you much farther than paying for things with a  credit card. Most people do not pay off their credit cards each month so  something you thought was only going to cost you $100 could end up costing you  double or triple once you factor in interest charges. Using spending cash to pay  for things like entertainment help to ensure you are with in your budget because  once cash is gone, it’s gone! It forces you to spend your money wisely and think  about what you are buying.

5. Begin saving for retirement early – Compounding interest  is a powerful tool once you understand it. If you start saving early for  retirement, you will have the power of compounding interest on your side. A person who  invests $5,000 at the age of 21 will have $120,000 more than the person who  waits until they are 39 to start investing (assuming an 8% interest rate).   Start early to begin building wealth for yourself.

save money for your own future needs satisfaction

6. Don’t waste money on food – The grocery bill and eating  out are one of the biggest ways to waste money. Buying only convenience food  from the grocery store can get expensive. Spending double and triple on food  that you could prepare yourself at home is not a wise way to spend your money.  Learning how to cook meals at home from scratch can help you save money on your  grocery  bill each month.

7. Decide what’s important to you – Spending your money  wisely isn’t all about cutting out everything you like just to make sure you pay  the bills. You should decide what you want to keep in your budget and what your  willing to give up to make sure you are spending your money wisely.

8. Realize when you’ve made a mistake and stop – If you go  through a period where you have spent too much money and you know you are not  spending your money wisely, take a step back and observe your behavior. Everyone  makes mistakes when it comes to money. That is how we learn. The most important  thing to do is to stop and get back on track as soon as possible.

9. Buy generic when you can – Sometimes it just doesn’t pay  to buy name brand. Things like food and clothing all have some form of “generic”  brand associated with them. If you are looking to spend your money wisely, buy  generic or off label when possible.

10. Utilize thrift stores, dollar stores or yard sales – There are treasures to be found at places like thrift stores and yard sales, all  it takes is a little effort. If you are wise with your money, you will let other  people pay full price for items that you can later pick up for pennies on the  dollar.

These  tips to help you manage your money wisely are just a few ways you can  make a big impact on how you handle your money. If you start paying attention to  your spending habits, you will be surprised at what you find and how it is  possible to start managing your money better.

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Article Source: http://EzineArticles.com

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