9 Money Management Tips to Improve Your Finances in 2024 (2024)

Money management and personal finance can be touchy subjects. Many people experience a lot of anxiety when they think about their financial lives, both as they are today and how they may look in the future.

Maybe you didn’t start saving for retirement as early as you’d hoped or perhaps you didn’t get an emergency fund in place and ended up in debt. Whatever your circumstances, deciding to take control of your situation now is always the best choice.

You simply have to follow a few key steps and you’ll be well on your way.

How to Manage Your Money

Managing money and learning how to do it is easier than you think.

If you aren’t sure where to begin, here are some of the best money management tips to help you win on the personal finance front.

  1. Start budgeting
  2. Build an emergency fund
  3. Get out of debt
  4. Improve your credit
  5. Maximize your income
  6. Start a side hustle
  7. Invest
  8. Get insurance in order
  9. Stay consistent

1. Start Budgeting

Budgeting often reinforces a scarcity mindset. People think they have to cut out all the small purchases that bring them joy. But if you take a balanced approach, once you learn how to budget, it can be a helpful tool for reaching your financial goals. And there are a handful of helpful budgeting apps out there to help.

If you want a simpler version of budgeting, simply focus on optimizing your three biggest expenses— housing, transportation, and food. While small purchases like daily lattes or your Netflix subscription can add up, you can save the most where you spend the most.

  • Housing: Through house hacking (a form of real estate investing), you can easily save 30% percent or more of your income. Your rent or mortgage is likely your biggest expense, so reducing it and investing the savings will add up quickly.
  • Transportation: In addition to your housing expense, it almost always makes the most economic sense to buy a used car instead of a new one and invest the savings.
  • Food: It’s also worth taking the time to reduce your food expenses and work hard to save money eating out.

2. Build an Emergency Fund

Major appliance malfunctions, car breakdowns, medical emergencies, and job losses have one thing in common—they can come out of nowhere. That’s why having an emergency fund is crucial.

Most experts recommend saving enough money to cover at least three to six months of expenses. To start an emergency fund, calculate your expenses, set savings goals, and make routine deposits to your account.

You can deposit your money into several types of accounts, but I recommend a high-yield savings account. Check out my emergency fund calculator for help determining how much to save.

3. Get Out of Debt

Being in debt can be incredibly stressful. But don’t worry—people get out of debt every day. Becoming debt-free is just a numbers game. There are many strategies for debt repayment, like paying off your smallest balance first then moving on to your next biggest debt (aka debt snowball) or paying down your biggest debt first (debt avalanche).

In most cases, I recommend paying down your debt with the highest interest rate first to save the most money.

  • Credit cards: Credit card debt usually carries the highest interest rates. In some cases, paying off high-interest credit card debt with a personal loan can be a smart move. You get a fixed interest rate and predictability with your payments and timeline.
  • Student loans: If you’ve already taken out student loans and the interest rate is above 5%, consider student loan refinancing and other ways to reduce student loan debt.
  • Mortgages: It often makes sense to keep your mortgage and put your extra money into investments. For five years, I had a 2.3% mortgage rate. I could’ve paid off my mortgage. Instead, I used the bank’s money for my home and invested my money in the stock market. I made over $100,000 on my investments because they grew over 10% each year. (10% is a lot better than 2.3%).

4. Improve Your Credit

Your credit report and score play a massive role in your financial life. By monitoring your credit, including your credit score, you can make decisions that improve your situation, both today and in the future.

To keep your credit score in good standing, be sure to pay your bills on time. Don’t max out your available credit, and work to build up a long credit history with multiple types of credit.

It’s also important to monitor your credit. While there are tons of credit monitoring apps out there, Credit Sesame helps you keep an eye on your report and score for free. You’ll receive customized recommendations and access to helpful tools that can help you get and maintain a good credit score, empowering you to make better choices every day.

5. Maximize Your Income

One way to speed up your journey to financial freedom is to maximize your income. Here are a few strategies for increasing your earnings.

  • Ask for a raise: Most people are underpaid but they’re afraid of getting fired or don’t know how to get a raise. Employers may have had the upper hand in the past, but this power dynamic has shifted, and in many industries, employees now have the leverage.
  • Contact recruiters: Build relationships with at least two recruiters in your industry. Recruiters live close to the market, so they know what you should be getting paid and can recommend skills to learn or recommend a higher-paying job.
  • Build passive income: With the right passive income ideas and some determination, you can succeed. Focus on ideas where you broker other people’s time instead of trading your own. Instead of walking dogs for a company that limits your hours and rates, start your own, get clients, then hire dog walkers. You can set your rates and you aren’t limited by the hours you have in a day.
  • Get free money: If you make purchases online, creating an account with a rebates site is a must. Start with one of our best cashback apps. They’re reputable and incredibly easy to use. If you use a credit card, one of the best money management tips around is to make sure it provides rewards. Just don’t use the rewards points as an excuse for unnecessary spending.

6. Start a Side Hustle

Diversifying your income can be just as important as diversifying your investment portfolio. By starting a side hustle, you can bring cash in and give yourself additional financial security.

A side hustle is anything you do to make money outside of your full-time job. You’re most likely to have success if you start a side hustle you enjoy doing where you set your own fees and hours.

While it’s not bad to drive for Lyft or Uber, there are real limitations with these types of side hustles. Any side hustle where you manage your own time and decide what you can charge has the potential to make you more money.

Some of the Best Side Hustles:

  • Blogging: Read my guide on how to start a blog with Bluehost and get my FREE 7-day blogging side hustle email course, where I share the step-by-step blueprint thousands of people have used to start a blog that makes money)
  • Online surveys: While you can’t necessarily earn a living by doing online surveys, you can earn some quick cash by sharing your opinion. If you want to make a little extra cash, check out the best survey sites.
  • Becoming a virtual assistant: Sound interesting? Find out how to become a virtual assistant.
  • Starting a YouTube channel: If you think you’re worth watching, here’s how much Youtubers make.

To learn more about side hustling, check out Chapter 10, More Money in Less Time: How to Launch A Profitable Side Hustle in my book Financial Freedom: A Proven Path to All The Money You Will Ever Need.

In the chapter I lay out a very detailed step-by-step strategy for picking, launching, and growing a side hustle.

7. Invest

Here are some pointers to help you invest, from what apps to use to retirement planning.

  • Get started: If you haven’t started investing yet, the most important step is to simply start today using one of the best investing apps.
  • Increase your contributions: One easy way is to increase your investment contribution amount 1% every 30 days by talking with your human resources department or 401(k) provider. If you prefer dollars over percentages, invest an extra $50, $100, or $1,000 more each month. Every dollar adds up.
  • Get educated: If you need a crash course on investing, check out my posts on how to start investing and investing strategies to get started.
  • Save for retirement: You need to prioritize retirement savings. Social Security only goes so far, and pensions are on the decline. So it’s crucial to invest in your financial future by saving for retirement. You can contribute funds to a tax-advantaged retirement account, like a 401(k) or an IRA to set your future self up for financial success.
  • Branch out: Want to diversify your portfolio? Try real estate investing. Today, anyone can get into real estate investing with real estate crowdfunding. If you’re looking for a portal and don’t have a lot of funds to get started, consider Fundrise. Fundrise provides access to eREITs and eFunds, a form of real estate portfolio with a level of diversification.

8. Get Insurance in Order

Some insurance products are more essential than others. If anyone depends on you financially, you have shared debts, or you don’t have money saved for a funeral, you need life insurance. There are multiple types of life insurance, and term life is a solid affordable option for millennials that can give you peace of mind at a low cost.

Another key insurance product people don’t reevaluate regularly is car insurance. If you recently paid off a car, you might not need full coverage anymore, presenting an opportunity to save, even if you don’t change carriers.

When it comes to life, car, or any other type of insurance, doing a little comparison shopping is always wise. You can get quotes from competitors for absolutely nothing and might discover an option that costs less than what your current provider charges.

9. Stay Consistent

Once you learn how to manage your money, it’s important to take steps to stay in control of your finances. Here are a few pointers to help you stay on track.

  • Track your money: it’s important to set up an easy way to track your money. What’s most important is tracking how much you’re spending, saving, and investing, along with the performance of your investments and your net worth. Although I use many of the best money apps, the free one I use daily is Personal Capital.For a step-by-step blueprint, check out my Personal Capital review.
  • Reduce major expenses: For nearly every family, housing is the biggest monthly expense. By reducing your housing costs, you can make significant headway in mastering your finances. Whether you choose to move to a more affordable home or rent out a room with Airbnb, making your housing more affordable can make a big difference in your life.
  • Avoid impulse purchases: Impulse purchases can quickly destroy a monthly budget. If you spot something you want that isn’t on your list, wait at least 24 hours to assess whether you’re just enticed or it’s something you actually need. For big purchases, you may want to instill a 7- or 30-day waiting period, just to be safe. Getting your spending habits in check can be a game-changer.
  • Make your checking/savings work for you: When you combine a high-yield savings account and a high-interest checking account, all of your money is always working for you instead of just sitting there. If you’re looking for great high-interest checking and savings accounts, check out Discover Bank. They offer free options that can help you make the most of your money. Read our Discover Bank review.
  • Optimize your taxes: The average American pays over 20% of their income to taxes, so finding ways to save money on your taxes can really add up over time. You don’t have to become an expert on tax laws, but it’s worth taking the time to understand your own taxes each year, even if you’re using a service like H&R Block, TaxAct, or an accountant.
  • Negotiate your bills: Not all costs are set in stone. If you want to lower your monthly expenses, Rocket Money (formerly Truebill) can handle the negotiations for you. Plus, you only pay for the service if they secure you a discount, with the fee being set at 40 percent of what you save, so you always come out ahead.

Learn More:

  • Best Money Tips
  • What Should I Do With My Money?
  • How to Spend Less Money: A Comprehensive Guide
  • Best Finance YouTube Channels

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  • 9 Money Management Tips to Improve Your Finances in 2024 (2)

    Financial Planning

    Mar 24 2020

    Great advices! It is very important to correctly distribute your finances, without thinking about the future, you can then regret very much. For example, in today's situation, when people are left without work and they have nothing to pay for the apartment. It is important to properly manage finances and follow the tips that you described. This is very useful for me, I will definitely take advantage of this. Thanks, have a nice day!

    Reply

  • 9 Money Management Tips to Improve Your Finances in 2024 (3)

    YoungandFinance

    Nov 14 2019

    I agree with finding a credit card with rewards. If you can have the self discipline, then why not get money for making purchases or paying bills that you have to anyway. Some people disagree but if you the self control and won't buy things you don't need, I think you should take advantage of the rewards.

    Reply

  • 9 Money Management Tips to Improve Your Finances in 2024 (4)

    Johnny Yim

    Oct 28 2019

    Thank you for the post! I am working on taking out my credit card debt, improving my credit score, and then getting some cash back reward credit cards to use when my score is higher.

    Reply

9 Money Management Tips to Improve Your Finances in 2024 (2024)

FAQs

What is the best financial advice for 2024? ›

Steps To Plan Your Finances In 2024
  • Set Clear Financial Goals. ...
  • Plan for Retirement. ...
  • Build an Emergency Fund. ...
  • Clear High-Interest Debts. ...
  • Evaluate Insurance Policies. ...
  • Evaluate Your Investment Portfolio. ...
  • Plan your Taxes. ...
  • Aim for a Balanced Lifestyle.
Jun 4, 2024

What is the 70/20/10 rule money? ›

The 70-20-10 budget formula divides your after-tax income into three buckets: 70% for living expenses, 20% for savings and debt, and 10% for additional savings and donations. By allocating your available income into these three distinct categories, you can better manage your money on a daily basis.

What is the 50/30/20 rule for managing money? ›

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.

What are the 3 basic steps to better money management? ›

Get started on path to financial success with these three steps: determining budgets, tracking spending, and creating realistic savings goals.

What are the financial predictions for 2024? ›

GDP growth in the United States is projected to be 2.6% in 2024, before slowing to 1.8% in 2025 as the economy adapts to high borrowing costs and moderating domestic demand.

What is the safest investment with the highest return? ›

These seven low-risk but potentially high-return investment options can get the job done:
  • Money market funds.
  • Dividend stocks.
  • Bank certificates of deposit.
  • Annuities.
  • Bond funds.
  • High-yield savings accounts.
  • 60/40 mix of stocks and bonds.
May 13, 2024

What are the 3 rules of money? ›

The 3 Laws of Money Management
  • The Law of Ten Cents. This one is simple. Take ten cents of every dollar you earn or receive and put it away. ...
  • The Law of Organization. How much money do you have in your checking account? ...
  • The Law of Enjoying the Wait. It's widely accepted that good things come to those who wait.

What is the 60 40 30 rule? ›

60/40. Allocate 60% of your income for fixed expenses like your rent or mortgage and 40% for variable expenses like groceries, entertainment and travel. 30/30/40.

How to budget $4 000 a month? ›

Applying the 50/30/20 rule would give you a budget of:
  1. 50% for mandatory expenses = $2,000 (0.50 X 4,000 = $2,000)
  2. 30% for wants and discretionary spending = $1,200 (0.30 X 4,000 = $1,200)
  3. 20% for savings and debt repayment = $800 (0.20 X 4,000 = $800)
Oct 26, 2023

Is $1000 a month enough to live on after bills? ›

Bottom Line. Living on $1,000 per month is a challenge. From the high costs of housing, transportation and food, plus trying to keep your bills to a minimum, it would be difficult for anyone living alone to make this work. But with some creativity, roommates and strategy, you might be able to pull it off.

Which strategy will help you save the most money? ›

The 5 Most Effective Strategies To Save Money For The Future
  • Set Your Goals Early On. Setting a financial goal early on will boost you to stick to your savings plan. ...
  • Understand Your Cash Flows. ...
  • Open a Savings Account. ...
  • Rethink Debit Cards. ...
  • Monitoring Your Spending. ...
  • Revise Your Emergency Fund.

How much money should you have after bills? ›

50% of your net income should go towards living expenses and essentials (Needs), 20% of your net income should go towards debt reduction and savings (Debt Reduction and Savings), and 30% of your net income should go towards discretionary spending (Wants).

What is the golden rule of money management? ›

Golden Rule #1: Don't spend more than you earn

If you always spend less than you earn, your finances will always be in good shape.

What is the #1 common denominator of financially successful people? ›

That said, work is the first part of being successful. The secret to financial success starts with doing what the financially unsuccessful aren't willing to do.

What is the number one rule of money management? ›

Golden Rule #1: Don't Spend More Than You Make

Basic money management starts with this rule. If you spend less than you earn, your finances will always be in good shape. Understand the difference between needs and wants, live within your income, and don't incur unnecessary debt.

How to prepare for a recession 2024? ›

Here are my tips to get ahead of the tides and recession-proof your cash.
  1. Think about where to cut back. ...
  2. Start building your rainy-day reserves, if you haven't already. ...
  3. Pay off high-interest debt ASAP. ...
  4. Think about your career. ...
  5. Keep calm and carry on.
May 9, 2024

Is 2024 a recession year? ›

Economists predict another year of slow growth around the world in 2024. While the risk of a global recession is lower in the year ahead, two G7 economies dipped into recession at the end of 2023.

What is the best financial advice you have been given? ›

What's the best financial advice you ever received?
  • Work to learn, do not work for money.
  • Spend wisely, always save for a rainy day.
  • Do not put everything behind a single idea.
  • Like thinking out of the box, start investing out of the box.
  • Get paid what you are worth.

How to cut costs in 2024? ›

Shop all at once — If you buy things one at a time through the week, it's easy not to realize how much you're spending. Instead, set some time aside to shop all at once so you can see the real total. Save to cart, save for later — This is a specific version of shopping all at once.

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