Money is an important asset in life – it’s what allows you to do the things you want, and it’s what causes a lot of issues when there’s not enough of it. One way or another, money is always going to be on most people’s minds, either because they want to know how to make more of it, they’re worried about how they’re spending it, or they want to ensure they’re using it wisely. 

While those first two ideas do need to be dealt with, we’re going to focus on that last one – using your money wisely – because that can help with almost every other money issue or question you might have (and if it doesn’t, you’ll have far fewer questions to ask, making sorting out issues a lot simpler anyway). With that in mind, here are some ways to use your money wisely to make the most of what you have, no matter how much that might be.

Photo by Reynaldo #brigworkz Brigantty

Create A Budget

If you want to know precisely how to use your money wisely, making a budget is the first step to take. When you look at your budget, you should be able to see exactly what money you have coming in from any income stream or streams you might have, and exactly how much money has to go out again before you top things up once more. That’s going to let you know that you have enough coming in to start with (and if not, there are some steps you can take to improve your income – like looking for a better-paying job, for example – or reduce your outgoings – like consolidating your debts or canceling unneeded subscriptions). You’ll also know how much money is left over, and it’s this leftover money that’s really going to be important if you want to use what you have wisely. 

Everyone has bills to pay, and ignoring them because they’re not pleasant to think about or they get in the way of your plans – what you really want to spend your money on – is not wise. That kind of thinking is only going to land you in more financial difficulties, so no matter how difficult it might be, creating a budget is the only way to start using your money more wisely. It will show you where there are issues (giving you a chance to put things right), and it will also help you when it comes to paying off debt and saving, which are our next points and very important. 

Pay Off Your Debts

If you have any debts, like loans or credit cards, you can just let them work away in the background, paying them off a little at a time, sure that one day they’ll be over and done with. This may well be true, but remember, the longer it takes to pay anything off, the more interest you’ll pay, and the less money you’ll have to enjoy in the way you want to. 

That’s why, if you want to use your money wisely, the first thing you should do after creating a budget and knowing what you can spare is to pay off your debts more quickly. The sooner they’re gone, the sooner you can put that money to better use, and the less stressed you’ll be about your finances. 

Be careful, though; in some cases, there might be penalties to pay if you pay the debt off before the term is up (loans are particularly notorious for this), so you’ll need to take that into account as well and ensure the additional fees don’t cause you any problems. 

Save

Once all your debts are gone and you feel freer and more at ease when it comes to money, you might be tempted to start spending that extra money. After all, if it’s not needed for your debts anymore, why not enjoy it? 

There is some merit to that idea, and it’s certainly not a bad idea to enjoy some of the money – treating yourself once in a while is ideal for wellness and good mental health – but spending all of it isn’t so wise, and it’s actually better to start saving instead, especially if that’s something you weren’t able to do before. 

You never know what’s around the corner, and having a few months’ worth of savings put to one side can really help if anything bad happened, such as getting sick or losing your job, for example. On top of that, you might have something important to save up for – a down payment on a house, a vehicle, a once-in-a-lifetime vacation, medical bills, and so on. 

That’s why putting the money you used to spend on your debt into a savings account is a wise move. You’re not going to miss that money because you used to spend it anyway, and it’s a great way to boost your savings and help you get further ahead. 

Invest

As we said, you might not want to save all your ‘spare’ money, and the good news is there are some useful things you can do with any extra funds you find yourself with. Saving is a great idea, and it’s relatively safe, but it won’t get you the returns that something riskier, like investing, will do. 

That’s why it’s wise to save most of your money and invest the rest. You’re spreading the risk and ensuring that you get the best of both worlds at the end of the term. If that sounds like a good idea, don’t rush into anything – getting advice from a financial planner is the best move to make first so you don’t make an error and lose more money than you make. 

Investing isn’t something everyone is comfortable with, so don’t feel as though you have to do it if you’d rather not. However, learning as much about investing as possible – ideally with expert guidance – can certainly help and it might be you’re able to make a decision that will improve your finances for the future.