The Ultimate Managing Money Tips and It Doesn’t Involve Busking

money saving tips

Managing money is a little like dieting…only in reverse. To get thin we have to burn more calories than we take in. To get rich we have to spend less than we earn. Neither are difficult equations. But both can be very hard to do.

At its core, managing money boils down to living within your means. But that is not always as easy to do as it sounds. Here are some tips to help you focus on some essential truths about money, so you can manage it well, and avoid it managing you.

Don’t confuse the image of money with the real thing.

Far too many people’s lives seem wrapped up portraying themselves as having a lot of money, when in fact they don’t. They may earn good salaries, but if all their cash is going to houses, cars, and lifestyles that cost more than they earn, then they are not really managing their money at all.

Effectively managing money requires taking a good hard look at what is real in our financial lives and what is not. Real money is what we have in the bank, not what we pretend to have. The loss of a job or other crisis not only crashes lifestyles based on illusion, but can cause massive psychological stress when the illusion falls apart.

Focus on your net worth more than your income.

Real wealth is determined not by how much you earn, or how much you can flaunt. Wealth is defined by your net worth…how much more you own in assets than you owe. A primary goal in managing money is to maintain yourself in the plus side of your balance sheet, so you can watch your real wealth start to grow.

Get rid of credit card debt first.

Credit card debt is so invasive and the interest so costly, that not much else in your money management plan will work until it is under control. Setting up a plan for yourself to pay off your credit cards will make the managing the rest of your money much easier (see our article How to Get Out of Debt On Your Own). In the meantime, put your cards away, and pay down as much as you can.

Decide on goals for your money. What do you really need your money to do?

Take some time and prioritize what the most important things are that you need your money for, after your routine expenses. Retirement? The kids’ college? A bigger house?

Write those important things down, and how much you think you can set aside toward them every month. If it is a tiny amount, that’s ok. You can increase what you can save after your debts are gone.

Carry that list with you. Put it in your wallet if need be, or wherever you are apt to see it when some new non-essential purchase comes up to tempt you. Then ask yourself if whatever you want to buy is really worth giving up what you already said mattered to you the most.

Write down everything you spend.

The financial gurus tell us all the time…we spend more than we think we do. In order to manage our money, we must be aware of it…all the time. The dollars we don’t think about slip away unnoticed, and then we wonder where huge chunks of our paychecks have gone.

Awareness and vigilance are essential to managing your money. Watch every dollar, so you always know exactly where it goes.

Follow the example of the unflashy rich.

Several years ago Dr. Thomas J. Stanley wrote an excellent book, The Millionaire Next Door, after he had surveyed the lives of numerous wealthy people around the U.S.

Dr. Stanley found that unlike the glitzy celebrities that make the tabloid front pages, the majority of real millionaires in the U.S. live in modest homes, drive ordinary looking cars, and maintain relatively frugal lifestyles. They also have the immense freedom that comes from being financially secure.

The lives of these unflashy millionaires offer real life lessons in managing money, which we can all learn from. I highly recommend it.

In summary it all comes down to this:

Spend less than you earn.

Save the difference.

Watch your money grow.


Best Business to Start With Little Money

Business Startup

No matter what great idea someone else has for a new business you should start, it is only the best if it is the best for you.

I can’t tell you the number of people I know who just love shopping yard sales and reselling the stuff online. They make real money, and it costs them almost nothing. But I hate yard sales, and the mere idea would…well, just drive me nuts.

So, we have put together some popular ideas for starting a new business on a shoe string. And we have added some questions for you to ask yourself before you dive into something that may not be right for you.

There are three essential things you need to decide before you try to start any business.

  1. What do you really like to do?
  2. What are you good at?
  3. What do you like to do, and are good at, that people will pay you for?

Chances are, if you plan to start a business with little money, you will be doing it around a job you already have. If that job is not your dream of how you want to spend your life, then the last thing you need is a second business that is not your dream job either.

So, what do you like to do? Is it a skill? Is it a talent? Write down everything you can think of, and if you want, prioritize them into which ones are most important.

Make another list of what you are good at. Some may also be things you like to do. After all, we tend to devote more time and effort to the things we love, whether we get paid for them or not.

Whatever the business is that you start, you will either be offering a service or selling a product. A service could either be direct to your customer, as in cleaning, lawn care, repairs, or you could consider how to teach a skill, such as how to cook, how to plant a garden. A product can be something you make yourself, or something you would enjoy selling for someone else.

See where your two lists overlap, then think about whether or not any of those are marketable. Don’t limit yourself. If your biggest passion is video games, and you are mega-champion material, don’t totally disregard it. Maybe you could create a website about gaming strategy, and also act as a sales affiliate for game companies.

If you are a housecleaner extraordinaire, you could start a cleaning business, or also write a cleaning hints column for your local paper. If you are a car nut, you could do repairs, rebuild and resell parts, teach basic auto mechanics, or even restore and sell entire vintage cars.

In Person Service Businesses You Could Start Right Now

Service businesses have some of the lowest start-up costs around. You should check for licenses needed in your community, and obtain damage liability insurance. Beyond that, your expenses probably don’t extend much beyond the tools of your trade, some inexpensive advertising, and gas.

We have already mentioned cleaning and lawn care. You could wash windows, or if you have a pressure washer, clean siding and driveways. People with snow plows on their trucks can command almost any fees they want in cold climates. In the summer you could repair anything from bicycles to barbed wire fences.

Anything you can do for the people who have no time is a workable business. Running errands, picking up dry cleaning, grocery shopping for shut-ins, dog walking, are all low investment ideas for people who like to be on the move.

Online Service Businesses

Through the Internet you can do work for people you never even meet. Virtual assistants answer phones, return emails and schedule appointments for clients anywhere in the world. It may require an additional phone line, where your client could route calls, or they may be set up as an online business only.

Online freelancing allows you to use business skills to help prepare sales presentations, spreadsheets, proofread documents, or scores of other tasks. You can either set up your own website, or use one of the online freelance job boards, which charge you nothing to get started, and bill your clients for you.

Online Retail Businesses

The Internet offers plenty of opportunities to sell products on line. These could be things you make yourself – artwork, photographs, e-books, handmade furniture, crafts – almost anything you can create. Or you can become an online retail shop, selling goods you purchase wholesale and resell at a profit.

First you need a website, but that is far less expensive than it used to be. Domain names are not expensive and hosting can cost less than $10 a month. Pre-designed websites can work fine if you only need a few pages. If you want an unlimited amount of pages, there are website companies that will walk through every step.

You can either use your website to highlight products you sell locally, link to online retailers like Amazon, or set up your own order/payment pages. You will need to do research all your best options. Plenty of resources exist to help you build your website or even create your online store for you.

Affiliate Marketing

This is a slower method to making money online, but it has worked very well for many people. Basically, you have a website with some interesting content of your own, with links and advertisements for products sold elsewhere. If your reader clicks on the ad, they can be taken to another site which will take care of the selling the product. Some advertisers pay for the click, and some pay a percentage commission on each sale.

When you match what you like to do, with your skills, and a style of business that suits you, you can start a business with little money. What you create in the end will be the best business for YOU.

Additional Resources

Website development:

  • (free website creation)
  • (extensive website business builder)
  • (about WordPress)

Online stores:

  • Bigcommerce

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