Managing our money can be a real problem in our current society with the rise in consumer spending. We think more about spending without putting in much thought in planning for our future or even retirement. More often than not, we spend more than we earn, landing up huge credit card debts along the way.

Learning to invest should be an essential goal, but very few people devote their time to this task.

Related: Factors to Consider Before Making Your First Investment

Ultimately, our financial future is determined by:

– The money we earn
– The percentage saved from the money we earn
– How to invest the money we save

These three points are the fundamentals to basic money management, playing a huge part in our financial future. However, most of us focus solely on the money we earn, some go to the second step (save) and only a few take the third step seriously (invest).

In fact, it is possible to earn little, save a lot, invest well and still achieve our financial goals.

If you have no idea on how to manage your money wisely, here are some tips to help you get started:

Establishing a budget

Have you ever said, “How am I going to pay this bill?” or “I should have predicted in advance to put money aside for this”?

In fact, it happens to all of us every month when facing our invoices or expenses. To ensure that you do not get a bill shock every month with the possibility of lacking in cash flow, here’s how you can plan a budget to finance your expenses.

Your budget allows you to have a clear idea of your money in and out, which is the first step to know when you want to know how to manage your money.

To establish your budget, follow these steps:

– Create a column for your resources and/or income: it must include your various entries of money (salaries and other sources of income such as social benefits and aids). This column allows you to have a clear idea of your income streams.

– Create another column for your expenses: it must include all your cash outlays (your bills and other expenses such as food, transportation, taxes, etc.). It allows you to have a clear idea of what you are spending. Note: You must always make sure that it is lesser than the first column.

Prioritize your expenses

Above all, you must distinguish what is necessary from what the superfluous. This allows you to better organize and prioritize your expenses. It is your duty to eliminate unnecessary expenses. The objective is to focus on what is important to save the maximum amount of money. This has the advantage of allowing you the chance to achieve, in the long run, the goals that are important to you.

Get in the habit of saving rather than spending

One cannot prudently manage one’s money, while ignoring the importance of saving. Your savings keep you safe even when you face unexpected events (job loss, illness, accidents, etc.). Get in the habit of putting aside any surprise cash, even if it’s just that $10 bill you found in your pocket. Further more, setting aside a small amount of your earnings, and grow that amount incrementally overtime will help you slowly build your savings.

Related: 10 Habits Of Self-Made Millionaires

Pay in cash whenever possible

Most people make credit payments or worst, take out loans to purchase consumer goods (electrical appliances, furniture, etc.). This can cost you more money (repay with interest) than what you originally had to pay for. Instead, if you must purchase something, put the money aside until it is enough and purchase it with cash. Avoid as much as possible racking up debts and credits. If you must take credit, do it only when you want to invest in a project that will bring you returns on investment.

Educating your family

Effective management of money cannot be done without the intervention of everyone. Educate your loved ones on your values with money. Teach them the virtues of saving and learn how to properly manage their finances. By sharing your values and priorities with family members, it will be easier to establish a reliable family budget and keeping to it. Remember that after all, your financial well-being is only as healthy as those closest to you.