Connect with us

Hi, what are you looking for?

Best Practices

How to Manage Your Money Better in 2020

The new year is a perfect time to get your finances in order. Check out our top tips on how to manage your money in 2020 and start a path to financial wellness next year.

manage your money

A brighter financial outlook might be on your wish list for 2020–but if you’re like many people, achieving that milestone is easier said than done. Learning how to manage your money better is a matter of setting a plan and sticking to it–whether you’re looking to pay off debt, save for a major expense like a summer vacation, or simply ease up on your spending. On the path to your financial makeover, here are our top proven tips for how to manage your money better in the new year.

1. Create a Budget

A budget is the single most valuable tool for creating healthy financial habits. Start by cataloging your current expenses according to the category, such as rent, utilities, food, entertainment, insurance, and hobbies. When you compare your budget to your monthly income, determine how much wiggle room you have and where you can afford to trim some expenses. Even ditching the daily latte or bringing a homemade lunch to work can free up some room in the budget. Keep updating your budget regularly throughout the month and adjust as needed. Reviewing your budget regularly will help you figure out how to manage your money most effectively.

2. Track Your Spending

If you think you might be spending excessively on items you don’t really need, challenge yourself to track your spending.  Write down everything you spend money on for a week (or more, if you like). The exercise will force you to take a hard look at your purchasing decisions and evaluate what you actually need. You can use a personal finance app like Mint to simplify the tracking process on the go. Another option is withdrawing a certain amount of money in cash per week for entertainment, dining, and other miscellaneous expenses—and only allowing yourself to use cash for those purposes.

3. Set Aside a Portion for Savings

Each week or month, set up an automatic recurring transfer to a savings account. It’s a good idea to have at least six to nine months’ worth of expenses set aside in an emergency fund account. That way, you won’t have to worry about borrowing money or racking up credit card debt in the event that you lose your job or you need to pay for your pet’s unexpected surgery. Once you have a solid emergency fund, create a separate savings account for more exciting future adventures — such as that long-awaited vacation. Aim to save at least 10-15% of your income, but it’s OK to start smaller with what you can afford.

4. Consolidate Credit Card Debt

If you want to learn how to manage your money, addressing your credit card debt is essential. Instead of paying off your credit card gradually over time at increasingly higher interest rates, consider taking out a low-interest personal loan through a lender such as Prosper. You’ll be able to lock in the interest rate over the entire loan period, typically either three or five years. That way, you can shorten the overall time it takes to pay off your debt and—most importantly—save yourself money.

5. Talk to a Financial Planner

If you find yourself spinning your wheels as you try to overhaul your finances, consider hiring a financial planner. Financial planners work with directly clients to help them realize both short and long-term financial goals. They’ll be able to evaluate your income and expenses and design a plan to help you manage your money more efficiently in 2020 and beyond. Building a stable foundation for your future could be well worth the initial upfront investment.

Read more: Too Much Credit Card Debt? Expert Tips for Paying It Off

Join our mailing list

Latest

Building Credit

Looking to boost your credit score? Credit scores can seem mysterious and overwhelming, but they don’t have to be. It’s easy to learn the...

Investor Center

Today we are sharing performance data from the Prosper Portfolio for October 2021. Highlights from the report include: Performance Update In October, approximately 63%...

Financial Literacy

Loan origination fees are a commonly misunderstood type of fee associated with mortgages and other types of loans. Many borrowers don’t understand what the...

Best Practices

How do car loans work? The logistics of buying a car can be a daunting task, but paying for it doesn’t have to be....

Credit Score Information

The first step toward improving your credit is improving your credit knowledge. We’ve put together this fun, five-minute quiz to test your credit know-how....

Best Practices

No one wants to think about end-of-life documents or the transition these documents represent. We don’t want to anticipate sorting through a loved one’s...

You May Also Like

Credit Management

Unemployed and looking for ways to borrow money? We’ll reveal what options you have when it comes to accessing emergency loans with no job.

Best Practices

Even before COVID, expensive healthcare costs had many Americans wondering what happens if you don’t pay medical bills. If you’re struggling with medical bill...

Finance for Homeowners

Taking out a HELOC to pay off your mortgage is a common practice among many homeowners today. Read more to find out the pros...

Financial Literacy

As you explore different financial borrowing options, you may find yourself asking, “What is a personal loan?” For more than a decade now, personal...