Money Management Tips

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Now more than ever, we need to be proactive and ensure we are smart with our finances. While some of us will feel the effect more than others because of the ongoing pandemic and several lockdowns, money management skills can benefit everyone.

At the beginning of each month, take some time and answer some basic questions: what are my cash inflows? What are my cash outflows? How much money do I have coming in? How much am I spending? How much would I like to save?

With any typical budget, you’ll need to set your inflows and outflows to understand what you can and are willing to save. To emphasize, your ability to save and the amount you choose is personal. So whether you save $5, $50, $500 or even $5000, that is up to you. But having some money for a rainy day will always be a good idea.

To start, reflect on your habits – what helped you save? Did you shop for better deals or cut back spending to only necessities? Take your time to examine your spending habits.

Statistically, here's what works:
  • Aim to build up a savings of emergency cash equivalent to three months’ income.
  • Use a rule called ‘50/30/20’ – spend 50% of what you earn on necessities, 30% on savings, and 20% on luxuries.
  • Try to save something – no matter how small, even if it is one-tenth of your income – into a pension in your twenties.
  • Don’t buy anything on credit if you wouldn’t pay cash for it.

Money management skills take time. It involves removing the bad habits and introducing the new ones. Over the next three months, try implementing this and let us know how it goes. If you need help, feel free to reach out to us.

Republic Bank
Posted: April 28, 2021
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