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6 Simple Ideas for Better Money Management

6 Simple Ideas for Better Money Management

When people mention money management, the instinct for most people is to zone out and think about budgeting, accounting and living frugally. It’s not a “sexy” topic to talk about. What you may not realise is money management is more about understanding yourself and your habits around money than the math.

That part is simple: Spend less than you earn, and invest early and often so compounding will make you rich when you’re old. The numbers aren’t difficult, but for most people, it is their psychology and emotions around money that prevent them from achieving their financial dreams. So, what are some ways you can start managing money better?

1. There are no shortcuts.
The basics of wealth building have been well-documented for centuries. Stop searching for shortcuts; focus instead on the simple things such as not to spend more money than you make.

2. Happiness comes from managing expectations.
You won’t find contentment by working harder to buy more stuff, because there’s always more stuff to be had. Escaping the trap is simple: Learn to be satisfied with what you have.

3. You can have anything you want but not everything you want.
Cut expenses ruthlessly on the things that don’t matter so you can spend lavishly on the things that do. Love antique airplanes? Great. Don’t care so much about cars? Don’t overspend there.

4. Perfect is the enemy of good enough.
Too often we fail to act because we’re searching for the absolute, surefire way to invest or save. We do nothing instead. But action cures fear, and a decent or simply good outcome is always better than nothing.

5. Don’t make excuses.
Don’t blame the president, your ex or your business partners for your financial situation. Your circumstances might not be entirely your fault, but they are your responsibility.

6. Systemize everything.
When it comes to saving and investing, you are your own worst enemy. So remove yourself from the equation. Use a foolproof system to manage your savings, bill payments and investments. You’ll save time and hassle–and be less inclined to impulsively spend your money on the next bright and shiny object that comes along.

Nobody cares more about your money than you do, so don’t trust anyone to manage it for you. You have it in you – the determination and the intelligence to run your own finances.

If want to break some of the bad money habits in your life and start your journey to financial freedom, one step in the right direction is to attend the Millionaire Mind Intensive, created by the author of the best-selling “Secrets of the the Millionaire Mind,” T. Harv Eker. Join us at the next Millionaire Mind Intensive in Germany BOOK NOW!

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A Few Ideas to Improve Your Money Management Skills

A Few Ideas to Improve Your Money Management Skills

Have you ever wondered why our educational system doesn’t teach life skills? I have. In fact, I just wrote another article about it. I teach communication at the university level, but by the time the students get into my class, their habits are pretty much already formed — and many of them are bad ones.

For example, maybe they saw their parents yell and scream at each other. Or maybe they avoided conflict altogether. These are not good skills to adopt. It’s really sad that they didn’t learn better life skills while they were in school.

Another life skill we weren’t taught in school is how to handle money. Once again, we learn from how our parents handled money. Were they spenders? Were they savers? Did they teach you invest? Did they teach you about the stock market or how to save for retirement? Or the fact that your student loans can actually affect your ability to buy or sell a house (yes, it’s true)? I’m betting the answer is “no” for most of us.

Just because you didn’t learn good financial skills in school doesn’t mean that you can’t learn them now. Here are some tips you can follow to get better at managing money.

1. Make a budget–and stick to it.

Do you know where all your money goes? Do you know how much money you spend on things like going out to eat, seeing a movie, buying beer, or purchasing clothes? Most people don’t. Are you one of those people who just prays every day that you don’t overdraw your bank account? If so, make your budget. Go back through your checkbook or bank statements for the last year and write down how much you spent in each category. You will probably be surprised at how much of your money is “wasted” on things you weren’t even aware of.

2. Be a conscious consumer.

When you go to the grocery store, do you have a list? Do you look at prices? Do you use coupons? There are many online resources and apps that can help you be more focused on what you are actually spending.

Don’t “sleep walk” through life. Be aware of every single cent you spend! When people don’t do that, their money tends to just evaporate. It takes a bit of effort to look for coupons, make lists, examine the prices at the stores where you shop, but it’s worth it in the long run. And, it makes a BIG difference.

3. Balance your checkbook.

I record everything I purchase. In fact, sometimes my friends make fun of me because I’m always whipping out my checkbook to record everything I spend whether it’s at Target, the gas station, the bowling alley, or pretty much anything else.

These days, most people just rely on looking at their bank balance online. But if you only do that, then it allows you to not care what you are spending in the moment. But if you hold yourself accountable by recording everything, then you will not over-spend or overdraw your account.

4. Have a plan and a vision.

In order to accomplish anything, you have to have a plan, right? I mean, if you wanted to go to San Francisco but you didn’t have Mapquest or a GPS to calculate your route, you would never get there! Instead, you would just drive aimlessly into nowhere.

That metaphor is pretty much what happens to you when you don’t have a financial plan. You often ask yourself, “Where did that money go?” But if you have a plan and a budget (see #1), then you will know exactly where your money has gone.

5. Think like an investor.

As I said in the introduction, our educational system does not teach us anything about how to handle money–especially when it comes to how to grow it. But think about it. Did the wealthiest people in the world just save $500 a month and leave it at that? Of course not! They learned how to turn that $500 a month into $1,000. Then $10,000. Then $100,000. And so on. You get the point.

You can’t expect to have a solid financial future if you’re not thinking about how to grow your money. So if you start to think like an investor, you’ll see your nest egg expand.

6. Work together with your partner/spouse on the same financial goals.

If you’re married or in a partnership where you share money, then you need to work together. Since I teach about relationships, I know that one of the biggest conflicts in relationships is money! Frequently, one person will be a saver, and the other will be a spender. This doesn’t work! So it’s important that both you and your partner get on the same page about your financial goals.

Sit down together and make your budget. Meet with a financial adviser so you can learn how to invest your money wisely. But if nothing else, you need to make sure that the two of you have the same goal and vision. And that you actually stick to it!

7. Commit to saving money.

Speaking of sticking to something, commitment is everything. You can’t do anything half-way. You can’t “sometimes” do something and “sometimes not.” You have to be consistent! You have to stay the course!

It’s kind of like losing weight. If you only occasionally eat less and exercise more, you MIGHT lose some weight. But chances are, you’ll probably just go back to your old habits. So that’s why you need to commit to saving money and building your future. Otherwise, you might as well not even bother!

If our schools taught us these financial skills, then what I have talked about in this article might come naturally to us all. But for most of us, it doesn’t. But it’s not rocket science. It’s just like anything–if you want it badly enough, you will do it! If you want to make your financial situation better you can do it! But you just need to start with the decision to do so.

10 Simple Ways to Manage Your Money Better

10 Simple Ways to Manage Your Money Better

Being good with money is about more than just making ends meet. Don’t worry that you’re not a math whiz; great math skills aren’t really necessary – you just need to know basic addition and subtraction.

Life is much easier when you have good financial skills. How you spend your money impacts your credit score and the amount of debt you end up carrying. If you’re struggling with money management issues such a living paycheck to paycheck despite making more than enough money, then here are some tips to improve your financial habits.

When you’re faced with a spending decision, especially a large purchase decision, don’t just assume you can afford something. Confirm that you can actually afford it and that you haven’t already committed those funds to another expense.

That means using your budget and the balance in your checking and savings accounts to decide whether you can afford a purchase. Remember that just because the money is there doesn’t mean you can make the purchase. You have also to consider the bills and expenses you’ll have to pay before your next payday.

How To Manage Your Money Better

    1. Have a Budget: Many people don’t budget because they don’t want to go through what they think will be a boring process of listing out expenses, adding up numbers, and making sure everything lines up. If you’re bad with money, you don’t have room for excuses with budgeting. If all it takes to get your spending on track is a few hours working a budget each month, why wouldn’t you do it? Instead of focusing on the process of creating a budget, focus on the value that budgeting will bring to your life.1
    2. Using the Budget: Your budget is useless if you make it then let it collect dust in a folder tucked away in your bookshelf or file cabinet. Refer to it often throughout the month to help guide your spending decisions. Update it as you pay bills and spend on other monthly expenses. At any given time during the month, you should have an idea of how much money you’re able to spend, considering any expenses you have left to pay.2
    3. Give Yourself a Limit for Unbudgeted Spending: A critical part of your budget is the net income or the amount of money left after you subtract your expenses from your income. If you have any money left over, you can use it for fun and entertainment, but only up to a certain amount. You can’t go crazy with this money, especially if it’s not a lot and it has to last the entire month. Before you make any big purchases, make sure it won’t interfere with anything else you have planned.3
    1. Track Your Spending: Small purchases here and there add up quickly, and before you know it, you’ve overspent your budget. Start tracking your spending to discover places where you may be unknowingly overspending. Save your receipts and write your purchases in a spending journal, categorizing them so you can identify areas where you have a hard time keeping your spending in check.4
    2. Don’t Commit to Any New Recurring Monthly Bills: Just because your income and credit qualify you for a certain loan, doesn’t mean you should take it. Many people naively think the bank wouldn’t approve them for a credit card or loan they can’t afford. The bank only knows your income, as you’ve reported, and the debt obligations included on your credit report, not any other obligations that could prevent you from making your payments on time. It’s up to you to decide whether a monthly payment is affordable based on your income and other monthly obligations.5
    1. Make Sure You’re Paying the Best Prices: You can make the most of your money comparison shopping, ensuring that you’re paying the lowest prices for products and services. Look for discounts, coupons, and cheaper alternatives whenever you can.
    2. Save Up for Big Purchases: The ability to delay gratification will go along way in helping you be better with money. When you put off large purchases, rather than sacrificing more important essentials or putting the purchase on a credit card, you give yourself time to evaluate whether the purchase is necessary and even more time to compare prices. By saving up rather than using credit, you avoid paying interest on the purchase.6 And if you save rather than skipping bills or obligations, well, you don’t have to deal with the many consequences of missing those bills.
    1. Limit Your Credit Card Purchases: Credit cards are a bad spender’s worst enemy. When you run out of cash, you simply turn to your credit cards without considering whether you can afford to pay the balance. Resist the urge to use your credit cards for purchases you can’t afford, especially on items you don’t really need.7
    2. Contribute to Savings Regularly: Depositing money into a savings account each month can help you build healthy financial habits. You can even set it up so the money is automatically transferred from your checking account to your savings account. That way, you don’t have to remember to make the transfer.8
  1. Being Good With Money Takes Practice:​ In the beginning, you may not be used to planning ahead and putting off purchases until you can afford them. The more you make these habits part of your daily life, the easier it is to manage your money, and the better off your finances will be.

50 Personal Finance Tips That Will Change the Way You Think About Money

50 Personal Finance Tips That Will Change the Way You Think About Money

We’ve certainly amassed a wealth of knowledge over the years covering the money beat—be it the dozens of “I got out of debt” success stories we’ve featured to the scores of psychological studies we’ve covered linking better financial decision-making to behavior change.

So given that it’s Financial Literacy Month, we’ve decided that there is no better time than now to round up our 50 top money tips into one juicy, super-helpful read. From the best ways to budget to how to boost your earning potential like a pro, these nuggets of financial wisdom are as fresh as the day they were published.

First Things First: A Few Financial Basics

1. Create a Financial Calendar

If you don’t trust yourself to remember to pay your quarterly taxes or periodically pull a credit report, think about setting appointment reminders for these important money to-dos in the same way that you would an annual doctor’s visit or car tune-up. A good place to start? Our ultimate financial calendar.

2. Check Your Interest Rate

Q: Which loan should you pay off first? A: The one with the highest interest rate. Q: Which savings account should you open? A: The one with the best interest rate. Q: Why does credit card debt give us such a headache? A: Blame it on the compound interest rate. Bottom line here: Paying attention to interest rates will help inform which debt or savings commitments you should focus on.

3. Track Your Net Worth

Your net worth—the difference between your assets and debt—is the big-picture number that can tell you where you stand financially. Keep an eye on it, and it can help keep you apprised of the progress you’re making toward your financial goals—or warn you if you’re backsliding.

How to Budget Like a Pro

4. Set a Budget, Period

This is the starting point for every other goal in your life. Here’s a checklist for building a knockout personal budget.

5. Consider an All-Cash Diet

If you’re consistently overspending, this will break you out of that rut. Don’t believe us? The cash diet changed the lives of these three people. And when this woman went all cash, she realized that it wasn’t as scary as she thought. Really.

6. Take a Daily Money Minute

This one comes straight from LearnVest Founder and CEO Alexa von Tobel, who swears by setting aside one minute each day to check on her financial transactions. This 60-second act helps identify problems immediately, keep track of goal progress—and set your spending tone for the rest of the day!

7. Allocate at Least 20% of Your Income Toward Financial Priorities

By priorities, we mean building up emergency savings, paying off debt, and padding your retirement nest egg. Seem like a big percentage? Here’s why we love this number.

8. Budget About 30% of Your Income for Lifestyle Spending

This includes movies, restaurants, and happy hours—basically, anything that doesn’t cover basic necessities. By abiding by the 30% rule, you can save and splurge at the same time.

How to Get Money Motivated

9. Draft a Financial Vision Board

You need motivation to start adopting better money habits, and if you craft a vision board, it can help remind you to stay on track with your financial goals.

10. Set Specific Financial Goals

Use numbers and dates, not just words, to describe what you want to accomplish with your money. How much debt do you want to pay off—and when? How much do you want saved, and by what date?

11. Adopt a Spending Mantra

Pick out a positive phrase that acts like a mini rule of thumb for how you spend. For example, ask yourself, “Is this [fill in purchase here] better than Bali next year?” or “I only charge items that are $30 or more.”

12. Love Yourself

Sure, it may sound corny, but it works. Just ask this author, who paid off $20,000 of debt after realizing that taking control of her finances was a way to value herself.

13. Make Bite-Size Money Goals

One study showed that the farther away a goal seems, and the less sure we are about when it will happen, the more likely we are to give up. So in addition to focusing on big goals (say, buying a home), aim to also set smaller, short-term goals along the way that will reap quicker results—like saving some money each week in order to take a trip in six months.

14. Banish Toxic Money Thoughts

Hello, self-fulfilling prophecy! If you psych yourself out before you even get started (“I’ll never pay off debt!”), then you’re setting yourself up to fail. So don’t be a fatalist, and switch to more positive mantras.

15. Get Your Finances–and Body—in Shape

One study showed that more exercise leads to higher pay because you tend to be more productive after you’ve worked up a sweat. So taking up running may help amp up your financial game. Plus, all the habits and discipline associated with, say, running marathons are also associated with managing your money well.

16. Learn How to Savor

Savoring means appreciating what you have now, instead of trying to get happy by acquiring more things.

17. Get a Money Buddy

According to one study, friends with similar traits can pick up good habits from each other—and it applies to your money too! So try gathering several friends for regular money lunches, like this woman did, paying off $35,000 of debt in the process.

How to Amp Up Your Earning Potential

18. When Negotiating a Salary, Get the Company to Name Figures First

If you give away your current pay from the get-go, you have no way to know if you’re lowballing or highballing. Getting a potential employer to name the figure first means you can then push them higher.

19. You Can Negotiate More Than Just Your Salary

Your work hours, official title, maternity and paternity leave, vacation time, and which projects you’ll work on could all be things that a future employer may be willing to negotiate.

20. Don’t Assume You Don’t Qualify for Unemployment

At the height of the recent recession, only half of people eligible for unemployment applied for it. Learn the rules of unemployment.

21. Make Salary Discussions at Your Current Job About Your Company’s Needs

Your employer doesn’t care whether you want more money for a bigger house—it cares about keeping a good employee. So when negotiating pay or asking for a raise, emphasize the incredible value you bring to the company.

How to Keep Debt at Bay

22. Start With Small Debts to Help You Conquer the Big Ones

If you have a mountain of debt, studies show paying off the little debts can give you the confidence to tackle the larger ones. You know, like paying off a modest balance on a department store card before getting to the card with the bigger balance. Of course, we generally recommend chipping away at the card with the highest interest rate, but sometimes psyching yourself up is worth it.

23. Don’t Ever Cosign a Loan

If the borrower—your friend, family member, significant other, whoever—misses payments, your credit score will take a plunge, the lender can come after you for the money, and it will likely destroy your relationship. Plus, if the bank is requiring a cosigner, the bank doesn’t trust the person to make the payments. Bonus tip for parents: If you’re asked to cosign a private loan for your college student, first check to see if your kid has maxed out federal loan, grant, and scholarship options.

24. Every Student Should Fill Out the FAFSA

Even if you don’t think that you’ll get aid, it doesn’t hurt to fill out the form. That’s because 1.3 million students last year missed out on a Pell Grant—which doesn’t need to be paid back!—because they didn’t fill out the form.

25. Always Choose Federal Student Loans Over Private Loans

Federal loans have flexible terms of payment if your employment dreams don’t exactly go according to plan after college. Plus, federal loans typically have better interest rates. So be smart about the loans you take out—and try to avoid these other big student loan mistakes.

26. If You’re Struggling With Federal Student Loan Payments, Investigate Repayment Options

Just call up your lender and ask whether they offer graduated, extended, or income-based plans. Read more about these options here.

27. Opt for Mortgage Payments Below 28% of Your Monthly Income

That’s a general rule of thumb when you’re trying to figure out how much house you can afford. Learn more about this number here. And then indulge in some voyeurism and see what other couples can afford.

How to Shop Smart

28. Evaluate Purchases by Cost Per Use

It may seem more financially responsible to buy a trendy $5 shirt than a basic $30 shirt—but only if you ignore the quality factor! When deciding if the latest tech toy, kitchen gadget, or apparel item is worth it, factor in how many times you’ll use it or wear it. For that matter, you can even consider cost per hour for experiences!

29. Spend on Experiences, Not Things

Putting your money toward purchases like a concert or a picnic in the park—instead of spending it on pricey material objects—gives you more happiness for your buck. The research says so.

30. Shop Solo

Ever have a friend declare, “That’s so cute on you! You have to get it!” for everything you try on? Save your socializing for a walk in the park, instead of a stroll through the mall, and treat shopping with serious attention.

31. Spend on the Real You—Not the Imaginary You

It’s easy to fall into the trap of buying for the person you want to be: chef, professional stylist, triathlete.

32. Ditch the Overdraft Protection

It sounds nice, but it’s actually a way for banks to tempt you to overspend, and then charge a fee for the privilege. Find out more about overdraft protection and other banking mistakes to avoid.

How to Save Right for Retirement

33. Start Saving ASAP

Not next week. Not when you get a raise. Not next year. Today. Because money you put in your retirement fund now will have more time to grow through the power of compound growth.

34. Do Everything Possible Not to Cash Out Your Retirement Account Early

Dipping into your retirement funds early will hurt you many times over. For starters, you’re negating all the hard work you’ve done so far saving—and you’re preventing that money from being invested. Second, you’ll be penalized for an early withdrawal, and those penalties are usually pretty hefty. Finally, you’ll get hit with a tax bill for the money you withdraw. All these factors make cashing out early a very last resort.

35. Give Money to Get Money

The famous 401(k) match is when your employer contributes money to your retirement account. But you’ll only get that contribution if you contribute first. That’s why it’s called a match, see?

36. When You Get a Raise, Raise Your Retirement Savings, Too

You know how you’ve always told yourself you would save more when you have more? We’re calling you out on that. Every time you get a bump in pay, the first thing you should do is up your automatic transfer to savings, and increase your retirement contributions. It’s just one step in our checklist for starting to save for retirement.

How to Best Build—and Track—Your Credit

37. Review Your Credit Report Regularly—and Keep an Eye on Your Credit Score

This woman learned the hard way that a less-than-stellar credit score has the potential to cost you thousands. She only checked her credit report, which seemed fine—but didn’t get her actual credit score, which told a different story.

38. Keep Your Credit Use Below 30% of Your Total Available Credit

Otherwise known as your credit utilization rate, you calculate it by dividing the total amount on all of your credit cards by your total available credit. And if you’re using more than 30% of your available credit, it can ding your credit score.

39. If You Have Bad Credit, Get a Secured Credit Card

A secured card helps build credit like a regular card—but it won’t let you overspend. And you don’t need good credit to get one! Here’s everything you need to know about secured credit cards.

How to Get Properly Insured

40. Get More Life Insurance on Top of Your Company’s Policy

That’s because the basic policy from your employer is often far too little. Not convinced? Read how extra life insurance saved one family.

41. Get Renters Insurance

It, of course, covers robberies, vandalism, and natural disasters, but it could also cover things like the medical bills of people who get hurt at your place, damages you cause at someone else’s home, rent if you have to stay somewhere else because of damage done to your apartment—and even stuff stolen from a storage unit. Not bad for about $30 a month!

How to Prepare for Rainy (Financial) Days

42. Make Savings Part of Your Monthly Budget

If you wait to put money aside for when you consistently have enough of a cash cushion available at the end of the month, you’ll never have money to put aside! Instead, bake monthly savings into your budget now. Read more on this and other big savings mistakes—and how to fix them.

43. Keep Your Savings Out of Your Checking Account

Here’s a universal truth: If you see you have money in your checking account, you will spend it. Period. The fast track to building up savings starts with opening a separate savings account, so it’s less possible to accidentally spend your vacation money on another late-night online shopping spree.

44. Open a Savings Account at a Different Bank Than Where You Have Your Checking Account

If you keep both your accounts at the same bank, it’s easy to transfer money from your savings to your checking. Way too easy. So avoid the problem—and these other money pitfalls.

45. Direct Deposit is (Almost) Magic

Why, you ask? Because it makes you feel like the money you shuttle to your savings every month appears out of thin air—even though you know full well it comes from your paycheck. If the money you allot toward savings never lands in your checking account, you probably won’t miss it—and may even be pleasantly surprised by how much your account grows over time. Find out other ways to get your emergency fund started.

46. Consider Switching to a Credit Union

Credit unions aren’t right for everyone, but they could be the place to go for better customer service, kinder loans, and better interest rates on your savings accounts.

47. There Are 5 Types of Financial Emergencies

Hint: A wedding isn’t one of them. Only dip into your emergency savings account if you’ve lost your job, you have a medical emergency, your car breaks down, you have emergency home expenses (like a leaky roof), or you need to travel to a funeral. Otherwise, if you can’t afford it, just say no. We explain more here.

48. You Can Have Too Much Savings

It’s rare, but possible. If you have more than six months’ savings in your emergency account (nine months if you’re self-employed), and you have enough socked away for your short-term financial goals, then start thinking about investing.

How to Approach Investing

49. Pay Attention to Fees

The fees you pay in your funds, also called expense ratios, can eat into your returns. Even something as seemingly low as a 1% fee will cost you in the long run. Our general recommendation is to stick with low-cost index funds.

50. Rebalance Your Portfolio Once a Year

We’re not advocates of playing the market, but you need to take a look at your brokerage account every once in a while to make sure that your investment allocations still match your greater investing goals. Here’s how to rebalance.

Top 10 Money Management Tips

Top 10 Money Management Tips

Money management is a tricky subject. For many, the topic’s accompanied with a feeling of apprehension. Maybe you’ve put off saving for retirement for a bit too long. Or, perhaps you’re worried about not having an emergency savings cushion. Whatever your concerns may be, there’s no time like the present to get a handle on your finances. It’s best to get started – as soon as possible – on good financial habits. Luckily, we have 10 money management tips to get you started.

1. Know Your Money Priorities

Before budgeting, you need to determine your priorities. If you skip this crucial step, you won’t buy into your financial plan.

You need a focus to align your money goals with your money habits. That focus is what’s most important in your life, right now. Do you have credit card debt that makes your stomach churn just thinking about it? Paying that down might be your No. 1 priority.

Patrice Washington, a leading authority in personal finance, entrepreneurship and more, advises that money priorities align with your personal values. “The largest categories should reflect what matters most to you,” whether you value international travel or taking care of your body. Then you can cut back on other categories to “save at maximum capacity” for your true priorities.

Maybe it’s a wedding or a vacation you want to save for. Or, perhaps you want to establish an emergency fund so you’re not “up a creek without a paddle” when your car needs an engine overhaul or your pet needs surgery.

Whatever concerns you most, make that your priority, at least to start.

2. Determine Your Monthly Pay

As the saying goes, “what gets measured, gets managed.” How can you manage your money without knowing what you earn each month? If you don’t have a concrete number, determine your monthly income after taxes. This will be easier if you’re a salaried employee with a regular paycheck. Freelancers may have to estimate their monthly income.

Once you have a number, add in any extra side gig money. Maybe you babysit sporadically or have a blog that earns ad revenue, or you teach a weekly fitness class. Whatever extra income you earn, add it into your monthly take-home pay.

3. Track Where You Spend Your Money

Time to play detective with your own finances. In order to get the full picture of your spending habits, you’ll need to do some financial forensics on yourself. If it seems overwhelming, limit yourself to one month’s worth of expenses.

Pull out your credit card statements, housing and utility bills, bank statements including ATM withdrawals and any electronic payment records, such as Venmo or PayPal. Either open a spreadsheet or get out old fashioned paper and pen – it’s time to total your expenses.

It helps to categorize as you parse your spending. For example, you might label purchases as needs, wants or savings/debt. Or, you can get more detailed and add categories such as entertainment, food costs, travel and transportation. It’s up to you how much in the weeds you want to get.

After you compile expenses into one spot, total each category to see where the bulk of your money goes. You might be surprised at how much you spend eating out. Or, how high of a percentage your housing costs are compared to your income.

4. Have a Plan – Any Plan

Now that you know how much you earn, as well as how much you spend, it’s time to make a plan. The best financial plans align your priority (money management tip No. 1) with your spending habits.

Let’s say you’re a fitness buff. When you totaled your expenses, you found that in an average month, you spend money on a gym membership, yoga class card and new athletic gear. If that’s important to you, you won’t have to cut it out. But, in order to meet whatever priority you’ve set — let’s say it’s an emergency fund — you’ll need to cut expenses elsewhere. That could mean shopping at a discount grocery store or brown-bagging your lunch instead of ordering takeout with your coworkers.

To meet your financial goal, maybe you set up auto-deposit to a special “emergency fund” savings account. When your paycheck is deposited, that money disappears before you can count it as spending money.

Whether you pay for a budget program like YNAB, or prefer a simple Excel spreadsheet, that’s up to you. This brings us to money management tip No. 5…

5. Stick to the Plan 

Once you pick a plan, give it a try for at least a month. You need that long to see if it works for you. Anything less, and you won’t see the benefit of keeping an eye on your finances.

So find a budget you want to try, get started and stay with it. It’s that simple. If you want, Washington recommends you “surround yourself with visual representations” of your goals. So if you’re saving for your next international trip, you can put up pictures of your dream trip to keep your goal fresh in your mind.

6. Expect Emergencies

money management tips

Regardless of what your priority is, you’ll want to have some easily accessible liquid funds.

Maybe you’re focusing on paying down your student loans, and you’re not concerned with building a hefty emergency fund. That’s fine, you don’t absolutely have to save six months of expenses. But you should save for at least three.

You never know what might happen. You or a partner could lose a job, or have a medical emergency or any number of circumstances. Whether you like it or not, life happens.

Having money to deal with problems as they come up will help you feel more secure, and a little more prepared. Most emergencies add enough stress as it is. Take away an element of worry with a financial cushion.

How you put money away for emergencies is up to you. Maybe you funnel all of your side gig money to an account you only touch in an absolute emergency. Or, it’s where any birthday or any gift money goes. It could be as simple as a small, monthly auto-deposit. It’s up to you.

7. Save Early and Often

This rule holds true regardless of your current priority. The sooner you save, the sooner you can build interest. You don’t even need an investment account to start earning interest. Most of the best savings accounts generate interest, and those accounts are FDIC insured. That means you don’t have the risk of losing your money, as with a brokerage account.

This rule also applies to retirement. The sooner you start putting money away in an IRA or 401(k), the better. Even if you’re years away from retiring, you still need to consider the future. Your money stands to grow the most if you start as soon as possible.

8. Take Advantage of Free Money

You don’t want to overlook what assets are available to you. If your employer offers 401(k) matching, you should absolutely take advantage of the benefit. It’s free money.

Another place to look is your health insurance plan. Are you paying for glasses or contact out of pocket when some of those costs are covered through your plan? Maybe your job offers a discounted gym membership. Take advantage of all the benefits your job offers; you might save some serious cash.

9. Relook Your Debt

Take a look at your total debt (money management tip No. 2). Is there anything you can refinance for a lower rate? Maybe it’s transferring a balance to a credit card with lower interest. Or, it’s consolidating student loans. It’s worth combing through your debt with a fine tooth comb to see if you can find a way to save.

10. Find What Works – And Keep Doing It

Another common maxim that applies to money management is “if it’s not broke, don’t fix it.” Once you find a system that works, don’t get distracted by new apps or conflicting financial advice.

It’s tempting to try the next best thing, especially if it promises to be easier, simpler or faster. However, if you’re in a rhythm that works — you’re saving money, meeting financial goals and building security — keep chugging along. Your focus will pay off.

Bottom Line

money management tips

As financial expert Dave Ramsey says, “You will either manage money or the lack of it will always manage you.” The best way to build financial security is to get a grip on how and where you’re spending your income, and then make a plan — and stick to it! Of course, life can throw you off track sometimes, but that’s OK. As long as you get back on budget, a hiccup here or there won’t destroy your future financial success.

Tips for Making the Most of Your Money

  • A good method for setting yourself up for long-term financial success is speaking with an expert. Try a financial advisor to get your finances on the right track.
  • If your savings account isn’t earning you interest, you may want to compare interest rates. Why not let your money work for you? Any money that’s sitting in an account should earn you at least a bit of cash.

How to Manage Your Money: 7 Skills You Can Master

How to Manage Your Money: 7 Skills You Can Master

Money management. Rarely taught, and desperately needed. These 7 money management skills will help you stay on top of your budget, so you can spend your money stress-free.

You know what they didn’t teach in high school, but probably should have? Money management.

Sure, the Pythagorean theorem was an important discovery. And we don’t regret knowing that Au on the periodic chart is gold. But it would have been just as practical to have learned how to set financial goals or balance our income and spending, or save or manage our (at the time, impending) student loan debt.

But knowledge is better gained late than never (or right on time, if you happen to be in high school and reading this!). And with that in mind, we’ve put together the money management skills you should master right now. Consider it extracurricular.

7 money management skills you should sharpen

Money management is important. It helps you achieve financial security and financial confidence. Here are seven key skills for successful money management:

1. Set S.M.A.R.T. financial goals.

Before you jump right into the nitty-gritty money management tactics and create your budget, you need to answer two very important questions: What do you want to achieve with your money, and why? Enter S.M.A.R.T. financial goals.

Adhering to the S.M.A.R.T. acronym helps you set and achieve realistic financial goals. Here’s what the acronym stands for:

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time-Oriented

For instance, consider the goal “Pay off credit card debt.” That’s a good goal, but it’s too vague to be actionable. Are you adding more debt as you speak? What’s your payoff date? Do you have the income/expenses ratio you need to achieve this goal?

The S.M.A.R.T. version of that goal might be “I will pay off $15,000 in credit card debt by August 2022.” That goal is specific and tells you exactly what you want to achieve. It’s also effective because it’s measurable by dollar amount, tailored to your specific needs, and come with a real (and reasonable) deadline!

We recommend setting three to five S.M.A.R.T. financial goals, but they’ll change over time, so you may need to revisit them periodically.

2. Organize your money with a budget.

Not everyone loves budgeting, but the results are worth it. At Simple, we’re big fans of the 50/30/20 budget. You aim to spend 50% of your income on ‘needs’, 30% on “wants,” and 20% on paying off debt and saving.

To create your 50/30/20 budget, start with the following steps:

  • Add up your income, expenses, and savings. Here’s a budget calculator to help you do just that.
  • Calculate dollar amounts of how much you can spend on needs, wants, savings, and debt each month. These can be estimates, you can adjust the real numbers as you go!
  • Track your spending every week by looking at your account activity to ensure that you stay on budget. (Plus, with Simple, the budgeting is built in!)
  • Budget for the next month at the end of the previous month. You might need to update spending categories based on monthly events, variable expenses, upcoming life changes, etc.!

Another budgeting strategy is zero-based budgeting. Check out this overview to see if it’s right for you!

Tip: To help you stick to your budget, set a reminder on your phone or calendar appointment to quickly check it once a week (e.g., 12:30 p.m. every Friday)!

Tip #2: If the 50/30/20 budget isn’t right for you, try envelope budgeting or zero-based budgeting (or a customized combination of the three)!

3. Build and Maintain an emergency fund.

Emergencies happen: losing a job, dealing with a car that goes kaput, struggling with medical bills. That’s why it’s a good idea to have money stored away to fall back on if things get tight.

Also called an emergency fund, experts recommend that you save enough to cover three to six months of your expenses. So, if your monthly expenses are $2,000, then you’ll want to set aside between $6,000 and $12,000. Don’t forget, it’s an emergency fund, not an I-really-want-it fund. Try your best to avoid using money squirreled away for emergencies on the things you want instead of the things you need. Money spent on what you want falls into the discretionary spending portion of your budget—that “wants” 30%.

If saving this much seems overwhelming (after all, you have other things to consider, such as paying down debt), start by building up $1,000 first. It’s okay if it’s slow going. Sock away what you can from your paycheck each month.

4. Make conscious spending decisions.

It’s so easy to spend money unconsciously, especially when purchases can be completed online in a single click. But think of it this way: when you don’t pay close attention to the money you spend, you’re taking money away from your future self.

Your budget should help guide your spending decisions, but here are a few ways to become a conscious spender:

  • Ask yourself a few questions before purchasing an item (e.g., “Why am I buying this?”).
  • Look at where you have multiple subscriptions (e.g. Netflix, Hulu) when one could do.
  • Try batch spending, where you create a 30-day list of items you have your eye on. If you still feel strongly about an item after 30 days, you can buy it.
  • Identify and avoid your spending triggers. For instance, if online shopping is your Kryptonite, unsubscribe from retailer emails, and unfollow on social media.

The point is is to make informed purchasing decisions based on your budget, not on a whim.

5. Diversify your income.

“Diversifying your income” simply means to create multiple income streams. Why? While it’s not possible in every situation, it’s a good idea to not rely solely on your full-time or part-time income since you never know what the future holds. Instead, find ways to make an extra $50-$100 per month or however much you can. Every little bit helps you reach your goals.

Here are a few ideas to get your wheels turning:

  • Become an online tutor.
  • Sell your used items on eBay or Facebook Marketplace.
  • Walk dogs in your spare time.
  • Sell digital products like printables on Etsy.

Even if you can spend only a couple of hours a week to work on an extra income stream, every little bit helps.

6. Create a debt payoff strategy.

Ah, debt. Not only can it feel overwhelming, but it’s also a roadblock to achieving your savings goals. Whatever type you have (e.g., student loans, car loans, credit cards), a debt payoff strategy will help you crush your debt as quickly as possible.

To get started, tally up your debt and the interest rates (it’s normally best to pay off loans with high compounding interest rates. Make the minimum payments on all of your debt to avoid defaulting and incurring late fees. Set up automatic payments to ensure that you never miss a payment.

Also choose a payment strategy: avalanche vs. snowball method. The avalanche method means you pay off debt with the highest interest rates first before moving on to debt with lower interest rates. The snowball method means you pay off your smallest debts first before moving on to bigger debt.

Determine how much extra you can put toward debt each month. The minimum is a great start, but the more you pay off now, the less interest you’ll pay over time.

Read more about our strategies for paying off debt.

If you have debt on multiple high-interest credit cards, a personal loan may help you consolidate and pay it off!

7. Pay yourself first.

Save or spend? That is the question. But is it? We all have good intentions to save money, but after paying bills and buying groceries, we often find there’s nothing left at the end of the month.

That’s why you should put aside savings BEFORE it’s time to pay bills. Automatically move 20% of your paycheck (remember the 50/30/20 budget?) to savings every month. Consider saving in the following accounts:

If you don’t think you can spare 20% of your paycheck, start by saving a smaller percentage, even just 1%. That might not sound like much, but 1% is better than nothing—you can build from there. It’s is still a step toward supporting your financial future and, over time, you can slowly build up to a larger percentage.

How to manage your money: Be consistent

Of course, these money management skills require a little work on your end. You have to be consistent in your efforts to ensure that you become and stay financially healthy. But mastering them will help you feel like a financial pro in no time.

Simple makes money management easy with a built-in budget tracker, spending analytics, goal setting features, and more.

Want to Get Famous? Make Amazing Stuff.

We all make mistakes, but not too many of us have made a $100 million blunder, as AppSumo founder Noah Kagan claims to have done when he got fired from Facebook. And there are lessons to take away from this story that are enormously relevant to each and every one of you, so pay attention.

Kagan joined Facebook as a product manager in 2005, about a year after Mark Zuckerberg founded the social network in his Harvard dorm room. But as the company grew from 30 to 150 people, Kagan couldn’t adapt, his issues got the better of him, and he was deemed more of a liability than an asset. And then he was gone.

As he tells it in a blog post, “I wanted attention, I put myself before Facebook. I hosted events at the office, published things on this blog to get attention and used the brand more than I added to it.”

He also says he was fired for going around the marketing team and for not being “great at planning or product management,” skills that the company needed to scale, not to mention that they were also part of his job description.

Now for the lessons. Some are his and some are mine, but they’re all counterintuitive. Not only that, they fly in the face of some massively overhyped myths that masquerade as common wisdom, these days, especially among the entrepreneurial crowd:

Build great products, not your personal brand.

According to Kagan, “The BEST way to get famous is make amazing stuff. That’s it. Not blogging, networking, etc.” He couldn’t be more right. If you focus on helping to make great products that customers love, that will make your company more valuable and that’s what matters.

Business is about business. It’s not about you. And when it becomes about you, that’s when things go south.

 

Figure out and fix your career-limiting weaknesses.

One of today’s most insidious fads is that people should focus on their strengths, not their weaknesses. And they should focus on the positive, not the negative. Not only is that a complete load of nonsense, it’s absolutely the worst advice for advancing your career and your business.

“If your weaknesses are hindering you at your job,” says Kagan, “fix them or move to another position.” The only way to grow – personally, in your career, and in business – is to figure out what issues, blind spots, or limitations are holding you back and fix them. We’re each our own worst enemy.

Getting fired can be the best thing that ever happened to you.

You heard it from Steve Jobs’ 2005 Stanford commencement speech, you heard it from me in my new book, Real Leaders Don’t Follow, and now you’re hearing it from Kagan: Getting fired can be the best thing that ever happened to you, but only if you take a cold, hard look in the mirror and face the truth.

On getting fired from Apple, Jobs said, “It was awful-tasting medicine, but I guess the patient needed it. Sometimes life hits you in the head with a brick.” The truth is, we often lock ourselves in our own little self-destructive cages, and it takes an emotionally charged, painful, and traumatic event to break us out.

It’s way easier to admit our faults than to change our behavior.

Kagan says that getting fired from Facebook was a $100 million lesson. And while I’m sure it was a big lesson for him, that statement is more than a bit of a stretch. It’s actually a Grand-Canyon-sized leap.

Maybe his shares or options were worth that much when Facebook went public, but he was only there for eight months and was fired in 2006 – a full six years before the company’s IPO. In other words, he still had many years to go for the shares to fully vest and for a liquidity event that would allow him to cash out.

My concern is this. One of Kagan’s self-professed issues is that he put himself and his need for attention ahead of the company and its product. I could be wrong, but I’m not so sure he’s addressed that limitation as well as he thinks. I’m just saying that maybe he still has work to do.

12 Profitable Hobbies You Can Monetize (You Probably Have At Least One)

12 Profitable Hobbies You Can Monetize (You Probably Have At Least One)

We’ve all got our hobbies—pastimes we dedicate some of our spare hours to because we find them fun or fulfilling.

While we don’t typically get into hobbies to make money, some of them can become a stream of income if you take it seriously enough. Depending on how you direct your talents and interests, you can get anything from free stuff to extra spending money to a full-fledged business where you sell things online—all by doing something you might’ve done anyway.

Here’s a list of 12 common lucrative hobbies that make money, whether it’s through freelancing, becoming an affiliate, building an audience, or starting a business.

1. Writing
writing

Writing and publishing online has the potential to offer you a lot of practical value outside of being a mere hobby. You can use it to further your career and establish yourself as an expert on a topic. You can build a platform for sharing your ideas. Or you can rent out your skills.

The most obvious way to make money writing is to sell it as a service—freelancing on sites like Upwork or Fiverr or reaching out directly to blogs for paid gigs. Good content writers with niche expertise are usually in demand.

However, if you have the discipline and know how to write a good blog post, you can create your own blog-based business by picking a niche and building an audience over time.

Whether you care about tech or travel or cooking, our guide to starting a blog that you can turn into a business will walk you through what you need to know.

For more inspiration, check out how:

Best Self Co. used blogging to sell its productivity tools.
Wait But Why built a business around Tim Urban’s humorous and insightful content.
2. Illustration and design
illustration design

Like writing, illustration and design are creative money-making hobbies you can do at home on a freelance contract basis. Fiverr, in particular, features many newer artists with a variety of illustration styles. Clients post projects for which they need to hire these skills, whether it’s marketing projects or custom portraits or anything in between.

If you want more control, you can put your art on items—from t-shirts to posters to canvases—and sell those instead. It’s important to understand that to turn your art into a product, you’ll need to cater to a specific market or build a unique brand. The former is usually easier.

Hatecopy is an excellent example of a business that was started by an artist putting their work onto things people can buy.

And you don’t need to front the money for inventory either. Print-on-demand services offer a low-risk way to take advantage of your creative hobbies. You’ll just need to create mockups of your products to list online. Once you make sales and know what designs and creative have the most demand, you can consider investing in your own inventory.

To learn more, check out the following resources:

How to Start a T-Shirt Business: Everything You Need to Know
How to Sell Art Online: The Ultimate Guide
3. Music

Next up for profitable hobbies that make money? Sell music. You can take this hobby business in a few different directions.

For starters, there’s the traditional approach to making and selling music—recording your own songs or albums and selling them on your website or hosting them on a platform like SoundCloud.

You can also create different types of sounds that aren’t full-fledged songs or albums, things like beats or samples. Beats are short hooks composed from different sounds and meant to be a background for a musician, while samples are a portion of a sound recording to reuse elsewhere.

You can list beats on third-party sites that work similarly to stock photo sites. Essentially, people purchase your music to use in their own content. These are typically shorter in length and rely more on instrumentals and less on lyrics. There are a variety of sites where you can list your beats, like Airbit and BeatStars. Airbit paid out $32 million in 2019 to its artists, while BeatStars sellers made an estimated $40 million—double what they earned in 2018.

Samples by Vanity sells samples that artists can remix and splice together to create their own music.

samples by vanity

You can make your audio exclusive or non-exclusive. There’s more money to be made when you sell exclusive rights, but you need to produce high-quality work, like SoundOracle. His excellent work has earned him quite the reputation—and his sounds have been featured in more than 20 Grammy Award–winning songs. He sells his beats with both exclusive and non-exclusive rights.

4. Cooking
Food has become an art form worthy of taking elaborate pictures and spending the time to perfect the craft. It’s not only amateur chefs who are involved, but people with adventurous palettes looking to explore new tastes.

Cooking is one of the hobbies that make money that you also can share with the world in a variety of ways, from starting a blog, YouTube channel, or Instagram account dedicated to recipes to diving head first into a business by creating your own food or cooking products. Some even hit the road with a food truck business.

According to Google, 59% of 25-to-34-year-olds take their mobile devices into the kitchen, using resources on the internet to find and practice new recipes. There’s definitely a market of DIY chefs looking for content (as well as products) you can create to serve them.

For inspiration, check out:

Spice Girls: From Hobby to Family Food Business
The Secret Ingredients to Building a 7-Figure Meal Service Business
Overdraft: Will His Family’s Food Business Turn into a Recipe for Success?
How to Start an Online Food Business (guide)
Template Icon
Shopify Compass Course: Sell Your Homemade Goods Online

Have a product you’re ready to sell? The Kular family shares their experience building a business around mom’s recipe book. From selling one-on-one to reaching the aisles of Whole Foods.

5. Gardening

Gardening has seen a spike in popularity as people spend more time at home. It’s a hobby that can make you happier, healthier, and perhaps even richer. Millennials spent $13 billion on plants in a single year.

Leaf & Clay sells succulents, either for a one-time purchase or on a subscription basis.

leaf clay

You can also sell products to help your customers indulge in their own gardening hobbies. Technology seller ēdn introduced an indoor garden to their product line.

edn

6. Photography
photography

If you own a nice camera and know how to use it, you’ve got a few ways to turn photography into one of your hobbies that make money on the side.

While you can become a freelance photographer, this can restrict you to shooting local events and gigs. And when there are no events, there are fewer photography gigs.

For a more scalable side hustle, sell your shots as stock photos or prints. You can also use your photography skills to grow a massive Instagram following and monetize it. You need to pick a niche to serve or a “lifestyle” you want to capture in your photos.

Fun fact: Professional photography accounts are the second-most lucrative on Instagram in terms of how much brands are willing to pay for a sponsored post. And you don’t need hundreds of thousands of followers either.

Check out our guide on how to sell photos online for a more detailed look at how to monetize your photography.

7. DIY crafts

Crafting is another on our list of profitable hobbies that make money. If you enjoy working with your hands, there are plenty of things to make and sell: candles, bath bombs, jewelry, soap, and more. This is a $40-billion industry waiting for your next idea.

“Handmade” communicates a certain quality, care, and uniqueness that department store alternatives often don’t offer. You can test the market for your products by selling them on a smaller scale to friends, family, or on Etsy, and think about scaling into a full-fledged business as you rack up customers.

If the idea of crafting the goods yourself isn’t striking a chord, you can also sell products that allow customers to flex their own maker muscles at home. Create DIY kits for fun projects, like FlowerMoxie’s DIY bridal bouquets. Or, tap into the home improvement industry—between 2018 and 2019, home improvement spending increased 17%.

FlowerMoxie

Here are a few more inspiring stories about DIY businesses and resources to show you how it can be done:

Growing a Handmade Brand: One Family’s Journey from Etsy to Shopify
Etsy and Shopify: How Three Makers Used Both to Grow Their Businesses
Why JM&Sons Launched Their Furniture Business Out of a Shipping Container
Etsy Alternatives: 8 Online Marketplaces and Website Builders for Makers
8. Comedy
comedy

Are you good at making people laugh? Do you know what the hottest memes are right now? Why not take that sense of humor and use it to build an audience on the internet? Comedy is one of the more creative ways to make money on this list.

You can probably think of several Instagram, Facebook, YouTube, or Twitter accounts that amassed large audiences simply by curating memes and viral videos or tapping into a niche of humor that no one else was serving. Who knew all those hours scrolling your social feeds would be one of the hobbies that make money?

Once you have an audience, you can partner with brands to do sponsored posts or turn your best running jokes into t-shirts and other products.

Examples of this include:

The WeRateDogs Twitter account
The Méme Bible
Yes Theory’s YouTube channel
9. Coffee
Selling coffee online is a great way to turn a common hobby into a business idea. Globally, people drink more than 400 billion cups of coffee every year, fueling an industry worth $60 billion annually. And as coffee drinkers have become accustomed to brewing their caffeine fix at home, it’s a prime time to capitalize on this opportunity. If coffee is one of your own passions, it could be next on your list of lucrative hobbies.

Whether you enjoy the hunt for the perfect bean, creating a perfectly frothed cappuccino, or just sitting down to your morning cup with a book, coffee drinkers can take this business idea in a number of directions.

Globe-trotting creatives Jeff Campagna and Tania LaCaria found that coffee mixed well with one of their other passions: motorcycle travel. They opened up their own bike garage, Steeltown Garage Co., complete with coffee shop and merch for sale, and they’re cultivating a whole community through their hobby-based business.

Check these out for more inspiration for your coffee biz:

How a Coffee Obsession Became a Business That’s Doubling in Growth Every Year
They’re Making Fair Trade Coffee a Bit Fairer
Overdraft: How This Army Vet Fought His Way out of a Financial Ambush
10. Memberships
Memberships are a great business model because they set you up for recurring revenue—often automatically withdrawn from your customers’ chosen method of payment. These businesses work by charging customers a recurring fee in exchange for products and/or services.

Here’s where the hobby aspect comes into play: memberships can be based on almost anything, in almost any niche. Gardeners might look to the California Native Plant Society for inspiration. Its memberships grant buyers access to educational content, events, and discounts with partnering businesses.

Danielle Spurge turned her crafting hobby into a full-blown business. Now, her company, The Merriweather Council, sells memberships to help entrepreneurial makers leverage their talents to create sustainable craft-based businesses of their own.

The Merriweather Council

The possibilities are quite literally endless here—you just need a hobby and some imagination to get the ideas rolling for your own membership-based business.

11. Brewing beer
Homebrewing, or making your own beer at home, is next on our list of money-making home-based hobbies. More than a million Americans have brewed their own beer at home, and it’s trending upward. In 2018 alone, the global homebrew market was worth an estimated $12 million.

If you love sampling or making craft brews, there could be a viable business opportunity there. Brooklyn Brew Shop sells homebrew kits and accessories so its customers can enjoy the hobby themselves.

Brooklyn Brew Shop

If you want to go this route, make sure you brush up on the legal requirements in your local jurisdiction. Alcohol products come with extra restrictions and regulations—and not being privy to that can end up costing you big time.

12. Gaming

You might be skeptical about the notion of gaming being one of the hobbies you can make money with from home. But if there’s a pattern in this list, it’s that if you can get people to pay attention to you, you can potentially turn it into a profit.

In this case, it’s the rise of the “Let’s Play” video format that has enabled us to make money via gaming, in particular live-streaming on Twitch. Just like learning how to make money on YouTube, you can monetize gaming by sharing ad revenue. But there’s also the potential to get one-time and subscription donations from a large community of viewers. This means the amount you earn through live streaming will vary greatly, but that it’s relatively easy to start at least making residual income.

While the amount of commitment you need to make a significant income might turn gaming into work for you, you can still have fun with it if you choose to stream a game you love, are good at it, and bring your personality to the table.

Gaming is a fast-growing industry with a lot of passion behind it. If you’re an avid gamer who understands the needs of the market, you already have an advantage as an entrepreneur in this space.

You can consider building a business of your own to cater to the needs and interests of gamers, like how:

PC Gaming Race speaks to the superiority of PC gamers.
Corey Ferreira sold gaming glasses inspired by his own gaming needs.
How to make money from a hobby
To start a business based off your hobby, you’ll need to take the following steps:

Validate your business idea: Do some market research to make sure there’s demand for your offering.
Find a business name: Give your business a unique identity.
Make a plan: A business plan will keep you on track to meet your goals.
Understand business finances: Set up business accounts, payment processing, and other money matters.
Develop your product or service: This is where you turn your hobby-inspired offering into something customers are willing to pay for.
Pick a business structure: Legitimize your business and protect your personal assets.
Research licenses and regulations: Ensure you’re conducting business lawfully.
Select your software systems: Build your website, set up accounting software, and get the rest of your tech stack up and running.
Find a business location: Determine where you can operate your business, whether it be from home or somewhere else.
Plan workload and team size: Bootstrap or hire help, depending on your plans.
Launch your business: Let the world know!
When you make money from a hobby
When you start making sales, you’ll need to keep track of the cash coming in and the money going out. This makes tax time easier, simplifies the process in case of an audit, and protects your personal assets. Additionally, it helps you ensure your business stays profitable. It’s a good idea to get set up with an accounting software to manage your books.

Make money from your paid hobbies
I enjoy writing, so I started a side hustle as a freelance writer to earn extra cash in school. I also like to dabble in dance, so I started a Shopify store dropshipping LED shoes for dancers.

In many cases, when it comes to our side hustles, it’s the things we tend to do for free and for fun that hint at the kinds of businesses we can pursue using our own passion and interest as fuel.

So if you have the urge to start something but don’t know where to start, ask yourself what you’re good at or already know about.

What do you already do in your spare time that could turn into something more?

Eight money tips to help young earners plan their finances

Eight money tips to help young earners plan their finances

Dreams, these days, come with a high price tag. A car for Rs 5 lakh, a house for Rs 50 lakh, several lakhs for a decent education for kids and crores for a cushy retirement. In fact, seemingly simple needs have been elevated to dreams due to the high cost associated with them. You require either a large income or a strategic plan to meet these basic life goals.

1. MAKE A BUDGET & START SAVING
Budgeting is the simple exercise of reconciling your income with your expenses, and should be your first step. Note down your monthly spending

Budgeting is the simple exercise of reconciling your income with your expenses, and should be your first step. Note down your monthly spending as per your ease of usage: Excel sheet, simple diary, mobile app, or desktop. The aim is to know how much you spend under various heads. “I use Excel sheet to keep track of my spending and know what percentage of my salary goes where,” says 24-year-old Saugata Palit, who has been working as senior executive in a private firm in Delhi for the past 18 month ..

5 ways to save more money from your monthly salary or income

5 ways to save more money from your monthly salary or income

If you’re wondering how much of your income you need to set aside for a secure future, the answer is … as much as you need to support your lifestyle.

1. Start early
Start saving as soon as you can. The sooner you start, the earlier you’ll reach your savings goals.
The power of compound interest works in your favour. Give your money time to grow, and you will reach your goals faster.
2. But not before settling your debts
First, let’s understand what happens when you borrow money to buy something. You accelerate your consumption — you spend today with tomorrow’s income (at a high cost, of course).
The high interest rates on your credit card (up to 3% a month) just can’t be made up by your investments! Borrowing at such high rates leaves you much poorer off then when you started.
Do you have a debt to settle? Pay it off first.

If you have low-interest-rate loans (such as a student loan or an agricultural loan), consider investing in a debt fund where the interest you earn exceeds that the interest you payout. That’s smart money in your pocket!
3. Create an emergency fund
Make sure you have at least four months’ worth of living expenses stowed away in an immediately accessible bank account or in liquid or ultra-short term funds.
This is your emergency fund and you must able to withdraw it immediately at will. Be mindful that you use it only in times of real emergency, such as unexpected medical bills or the loss of a job. Keep this money in a separate bank account or a fixed deposit so that you don’t touch it without good reason to.
4. Set targets based on needs
Calculate how much money you’ll really need for short-term and long-term expenses.

Say, you need to buy a ₹ 12 lakh car five years from now. You need to save ₹ 20,000 a month for five years to reach your goal.
But if you were to invest your savings and instead earn, say, 8% on them, the amount you need to save each month to buy your car in five years drops to ₹ 16,350 a month.
You’d also have to account for taxes on returns, which vary depending on the time period of your investment and the tax slab applicable to you.
5. Save for retirement
Its never too early to start saving for retirement. We all dream of a life where we don’t have to work for money anymore, and our money works for us instead! The key to a successful retirement is to start early. The earlier you start saving, the more you’ll have when you retire!

So if you’ve always dreamed of buying a round-the-world ticket on your 70th birthday, or setting up an education fund for your grandchildren, start saving for it now.

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