10 Best Ways To Improve Your Money Management Skills

Last Updated by Neiko Johnson on 
August 15, 2021
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10 Best Ways To Improve Your Money Management Skills

We love helping people learn new money management skills so they can find new and realistic ways to be successful.

Learning effective money management skills helped us pay off $240,000 in 27 months, and we used many of the money management skills we are going to share with you today.

We cut our expenses, set financial goals, increased our income, and more.

In fact, there are so many money management skills out there, you just have to find what works best for your situation.

In most cases, finding the right skills can be life-changing. Life can be hard at times, especially financially. But, this list includes ways for you to be successful at managing money even during difficult times.

Above all, with consistent action, it's very possible to change your financial future. So, here are 10 ways to improve your money management skills.

Get cheaper home and auto insurance

It's very common for people to keep the same insurance each year and not reevaluate their premiums.

In fact, they pay a penalty for not looking. For example, your insurance provider could be offering new discounts for your premium presenting an opportunity to save but you will never know about the discount if you don't ask.

Insurance companies rarely contact you offering a discount. You have to regularly check in with your insurance agent for up-to-date pricing.

Most importantly, doing a little comparison shopping is very effective. You can get quotes from competitors for free and it might save you a few bucks in the long run.

You could have too much coverage on your home and be paying too much for car insurance if you are a low mileage driver.

We make sure to comparison shop at least annually using the Gabi tool. It's very easy to use, saves us time, and brings peace of mind knowing we are getting the best rates possible. Click here to check out Gabi and see if you can save money on your insurance.

Create an effective budget to have good money management skills

There are a lot of people who hate budgeting and don't think it's necessary. However, we believe budgeting shouldn't be viewed as a restriction, it should be viewed and giving yourself permission to spend.

Money management skills are all about perspective and understanding how to do things that are effective for you.

It's worth having a budget so you understand where your money is going each month. Once you have an idea of where your money is going, you can figure out how to manage your money more effectively.

Related reading: Budgeting 101: How To Create A Budget

Start a side hustle

Having multiple streams of income can be just as important as diversifying your investment portfolio.

By starting a side hustle, you can bring in extra cash and create financial security.

It's important to start a side hustle doing something that you enjoy and provides flexibility.

The day we started our blog we had no idea how much we would love it. It's created an additional stream of income for us and allows us to share our knowledge on money. It's a win-win!

Click here to learn how to start a blog in less than 15 minutes.

Some other great side hustles include:

  • Online surveys
  • Become a virtual assistant
  • Start a YouTube channel

For more side hustle and work-from-home ideas, check out this article.

Pay off debt

Being in debt can limit the amount of wealth you can build. Student loans, credit cards, and car loans can be stressful and keep you up late at night worrying.

On the other hand, a lot of people get out of debt and you can too. We paid off a lot of debt fast by changing our money management skills.

Ultimately, we learned that getting out of debt and not adding any more debt was the fastest path to wealth.

The interest accrued from credit cards will hurt your pockets due to the high interest rates.

However, we don't recommend debt even if it's 0% interest. The 0% offer creates a habit of you signing up for debt because of the enticing offer. Remember, we want to eliminate debt not add it.

There are many strategies to pay off debt but you must choose which method works best for you. We use the debt snowball method because we like the motivation of knocking out smaller debts to get to the next one.

But, there is also the debt avalanche where you pay off the highest interest debt first instead of the smallest debt.

At the end of the day, it's all about focusing on getting out of debt because it saves you the most money.

Related reading: Paying Off Debt: Is It Worth It?

Start investing early

Most importantly, a great way to see returns on your money is to start investing as early as possible. The key is to invest and benefit from compound interest. This is how your investments start earning money on their own.

And yes! You can invest even with no experience.

Certainly, there will be ups and downs when you start investing. However, staying committed to your investments for the long run is very important. The longer your investments stay plugged in, the more money you will earn.

you must invest to build wealth and reach financial freedom. You can start with investing as little as $25/month and that will still make a difference.

The Motley Fool Stock Advisor is a great tool to learn more about the top stocks in the market. The Stock Advisor team has outperformed the market 5-to-1 in recent years.

Related reading: How To Start Investing With No Experience

Side note: We highly recommend that you check out M1 Finance if you are interested to start investing. M1 Finance is the future of finance offering a robust tool that includes free investing, automation, and optimization. Their sleek, modern app is very easy to use.

Build an emergency fund

As you probably already know, it's very important to build an emergency fund. However, after 2020 it's even more important to protect your future.

You may experience a job loss, medical expenses, car trouble, house repair, etc. This is why an emergency fund is crucial.

If you have something big you can't live without or things that require regular maintenance, you must plan for them.

It's never too late to start building your emergency fund. You can set aside a certain amount of money each month to start your emergency fund.

Another thing to remember, make sure to keep your emergency fund separate from your daily bank accounts. This will prevent you from using your emergency fund for things that are not emergencies.

A great resource for a savings account is CIT bank. They offer competitive interest rates and are an online-only bank. We are huge fans of online-only banks because they save money from not having a physical location and normally offer higher interest rates for consumers!

Whichever route you choose to go, make sure you are prepared for emergencies.

Savings Builder

Buy life insurance

Life insurance is a must no matter what age you are. And you can find life insurance relatively cheap depending on which type of life insurance you choose.

Above all, without having life insurance, you leave your loved ones at risk if you pass away. Especially if someone depends on your income.

It is recommended by experts to buy 10-12 times your income for life insurance.

Haven Life is one of a handful of insurers that issues life insurance policies with no medical exam. But, certain people may still need to pass medical underwriting depending on the situation. Also, they offer great rates and have high ratings.

We use term life insurance for our policies and it has shown to be the best coverage for the lowest cost.

Related reading: Financial Security: The Secrets to Generational Wealth

Sign up for cashback and rewards

There are a large number of cashback and rebate apps available today. Also, they are easy to use and you can even sometimes receive money back from the same purchase on multiple apps.

If you make purchases online, it's a must to create accounts with cashback and rebate sites. It's free money!

For example, by shopping through Rakuten, you can earn money back at thousands of popular stores each time you make a purchase. Rakuten is free to use, so there's no reason not to sign up. Click here to open your account with Rakuten today.

Related reading: 20 of the Best Ways to Save Money

Negotiate your bills

A lot of services have costs that are negotiable thanks to the hidden discounts and promotion rates.

A great way to make sure you are receiving the best rates is to use Trim. Trim can handle the negotiations for you.

Most importantly, you only pay for the service when they secure a discount for you that's at least a 33% savings. So, you always will come out ahead.

Reduce expenses

For most people, housing is their largest monthly expense. However, you can find ways to reduce your housing costs to save a ton of money.

By saving money, you can speed up reaching your financial goals.

Having an understanding of what expenses you have and how much you spend is important before you can begin finding cheaper options.

These money management skills will help you on your financial journey. You got this!

How successful are you with managing your money?

Article written by Neiko Johnson
Neiko is a personal finance expert and Co-founder of Secret to Finance. Along with his wife Alexis, they learned how to get out of debt and paid off $400,000 in 4 years.

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