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If you don't have a budget you’re definitely a poor money manager. There's just no way to be a good money manager without a budget. The simplest answer to this is called the 50/20/30 budget. It's where you devote 50% of your take-home pay to your necessities such as housing, food, transportation and insurance. The 20% is for saving and the 30% is for your discretionary spending like entertainment, eating out, clothes and those fun weekend trips. Of course, you won't be able to use even this simple method for budgeting unless you first track your spending for at least a month.
5. You don't know the size of your debt
Another sign you’re a poor money manager is if you don’t know how much debt you have. Is this because you don't feel you're carrying that much debt? Or maybe you don't want to face the reality of how much you actually owe. Regardless of the reason if you want to be a better money manager, you need to total up your debt to see exactly where you stand. If you have an auto loan, several credit cards, a personal loan and some other forms of debt the easiest way to face it is by using a spreadsheet program. If you don't own one there's the free Sheets from Google. You'll need to have five columns as follows: name of creditor, amount owed, its interest rate, the minimum payment required and its due date. Total up that second column and you'll know whether you're really in trouble with debt.
6. Making just the minimum payments is poor money management
If you have credit card debts and are making just the minimum payment each month it’s a sure sign you’re a poor money manager. The credit card companies want you to make just the minimum payments because that means you're carrying debt forward so they earn money on the interest they charge you. Here's an example of this. Let's say you owe $5000 on a credit card at 18% interest and make just the minimum payment of $100. In this case, it would take you 94 months to repay the $5000 and the credit card company would earn $4311.18 in interest charges. Multiply that $5000 by two or three and you should be able to see why making just the minimum payments each month on your credit cards is light years away from good money management.
7. You're constantly getting hit with overdraft fees and late fines
Overdraft fees and late fines can be a real killer. If you're constantly getting hit with them it's because you’re a poor money manager. Maybe you let your bills stack up on a desk or table unopened for weeks on end. Or maybe it’s because you fail to check your bank account balance before going on a big shopping trip. These fines and overdraft fees are a total waste of money because you get nothing in return for them. The answer to this is to set up as many automated payments as you can. You should be able to do this through your bank. It may take you 15 or 20 minutes to do this initially but it will eliminate all, or most all. of those late fines. Of course, whether you're going shopping or have created several automated payments, you’ll need to check your account balance at least weekly to avoid overdrafts.
If you sincerely want to stop being a poor money manager, watch this video for 10 tips to help you be a better money manager,