Ever felt like it’s such a struggle to be good with your money? The good news is that being good with or getting better with your money does not have to be difficult.
The trick is learning various ways to curb your spending and save money that isn’t overwhelming. By starting good money habits and dropping bad ones, you will get better with money and reach your financial goals in no time!
Here are 10 tips that will simplify the way you think about and deal with your money. This, in turn, helps you get better with it!
1. Work on your money mindset
If you want to be good with or get better at managing your money, you must first decide you are ready. This means working on your mindset and empowering yourself mentally to succeed. A way to stay empowered could include keeping a journal, saying affirmations, reading books, watching motivational videos, or getting a mentor. These are all ways to keep your mindset in check.
You may have heard the saying, «you become what you think.» Well, if you want to get better at managing your money, you have to keep it at the top of your mind.
2. Set specific & measurable goals
You probably have a few goals that money can help you accomplish, right? Setting goals helps you lay out your «why.» It also gives you something to work towards or, in other words, a reason to be better with your money.
As you set your goals, keep in mind that you want them to be measurable. You also want to break your big goals down into small easy to digest chunks, so you don’t get overwhelmed from pursuing massive goals. A good place to start is to focus on getting 1% better each day.
3. Create a plan for your finances
When you have a plan in place, it’s easier to get where you are trying to go. Once you’ve laid out your goals, you want to create a plan to achieve them. How exactly do you intend to pay off your debt, save for retirement, bulk up your emergency savings, put money aside for your other goals, and do all the other things you might want to do?
Well, a good place to start with laying out your plan is to determine how much each item will cost you. Then determine how much time you need and then set things up to start designating funds towards each of your goals according to the priority you have assigned them.
4. Make budgeting your best friend
I know, I know, not a lot of people love (or even like) to budget. However, if you are really serious about getting better with money, you are going to have to fall in love with it. Your budget is basically there to help you track your spending against your income.
Your goal should be to spend less than you earn AND widen the gap between your income and your expenses so you can free up funds to accomplish your goals. The key to budgeting successfully is finding a budgeting method that makes things easy for you and one you like.
5. Automate, automate, automate
Automating your savings is your next best friend! Studies show that people who automate their savings save more than people who don’t. Why? Because they stay consistent with their deposits. As a result, they don’t give themselves a chance to debate whether they should save or not.
The funds have been automatically assigned to their savings accounts, and they’d have to take extra steps to spend it! Automation is one of the easiest ways for you to get better with your money!
6. Shop with a plan
The easiest way to derail your budget is to go shopping without a plan or a list. This commonly happens when you pick up inexpensive items without realizing how quickly those small costs can add up. A perfect example is going grocery shopping. The same thing can happen if you are mindlessly browsing shops online etc.
To make it easier on yourself and your wallet, make a list of what you need before hitting the shops. Having a list to reference makes you more likely to stick to your plan.
7. Check your credit
Set a reminder on your calendar to check your credit frequently. You want to make sure all the hard work you are putting into improving your finances isn’t impacted by inaccurate reporting or identity theft. By the way, you are legally entitled to a free copy of your credit report every 12 months from each of the 3 main credit bureaus.
8. Stay motivated with financial podcasts & videos
Regularly listening to financial podcasts and watching money tips from your favorite female YouTubers will motivate you to achieve your financial goals. Hearing how others have overcome their financial struggles can help you realize you can do it too!
Also, there are many ways you can learn to save and invest your money. Consistently educating yourself on different money topics will help you be better with money.
9. Stop charging purchases
Credit card debt is bad no matter how much money you make. Paying high interest can cost hundreds to thousands of dollars a year. The best thing you can do is quickly reduce your credit card debt and stop charging up your cards. If you can’t pay the full balance off every month, then put that plastic away so you can get out of debt and start saving money instead!
10. Have a little fun
All fun and no play…well, you know how the saying goes. It’s ok to live a little by splurging every now and then, as long as it fits into your plans and does not derail your goals. A great way to do it is to set up a splurge or fun account for things like shopping, traveling, eating out, etc., and designate some funds to it each month from your budget.
Start now to get better with your money
If you start with these 10 tips, you’ll be well on your way to getting better with your money! Another thing to remember when managing your money is that you need to define your needs vs. your wants.
This will help you apply these tips easier because you will be able to determine what you truly need, which will decrease impulse purchases and enable you to hit your money goals faster. Learn more about ditching debt and reach financial success with our FREE financial courses and worksheets!
Save more, spend smarter, and make your money go further
People tend to talk about being financially savvy in a black and white way. You’re either good with money or you’re not.
But as with most things related to your finances, it’s a little more complicated than that. You could be great at earning money and terrible at saving it – or vice versa. You could have an impressive net worth and a terrible credit score. You could be the world’s greatest budgeter and the world’s worst investor.
In other words, being “good with money” can mean a lot of things. Let’s take a look at some of the most important factors to consider.
Metrics to Track
While there’s not a single figure that shows you’re good with money, there are some numbers you can track to see how you’re doing (Mint tracks these for you):
Net Worth
Your net worth is your total assets minus your liabilities. Assets include the money in your bank accounts, investment accounts, collectible items, home equity and more. Liabilities include what you owe, like your credit card balance, auto loans, student loans, mortgage balance and more.
To calculate your net worth, add up your assets and liabilities separately. Then, subtract the liabilities from the assets. Don’t be surprised if your net worth is negative. That means you owe more money than you currently have. Recent graduates and young adults often have a negative net worth, especially if they have a lot of student loans.
But as you get older, your net worth should increase as you pay down debt and start investing consistently. Try to track your net worth a couple times a year. You can create your own spreadsheet or use Mint’s net worth tracker.
“Over time you will see your assets really starting to grow,” said Ryan C. Phillips, CFA, CFP, and founder of GuidePoint Financial Planning. “The success from this can be really motivating and many times will lead individuals to save and invest even more.”
Credit Score
Your credit score shows how responsible you are as a borrower. Potential lenders, utility companies, cell phone providers, car insurance companies and landlords will look at your credit score before approving you.
A credit score doesn’t take your savings rate or investment success into account, so it’s not a holistic number. But it does show if you’re good at borrowing money and paying it back. Even if you plan to avoid taking out loans, you may still need a good credit score.
Meeting Your Personal Goals
Being good with money doesn’t mean reaching the same financial goals that everyone else aspires to. For example, many believe that owning a home is necessary for financial success, but if you move around frequently for work, buying a house each time may actually negatively impact your finances. In this example, renting may be a better use of your funds.
“Money is simply a tool that you can use to reach your personal goals and live a simpler, happier and less stressful life,” said financial planner Kyle Simmons of Simmons Investment Management LLC.
Make a list of your goals, like becoming self-employed, traveling abroad once a year or switching to part-time work. Then, figure out how your finances can help you achieve those goals.
Monitoring Your Expenses
Even if you don’t follow a strict budget, looking at your transactions at least every month is wise. You’ll only notice fraudulent purchases, mistakes and surprise expenses if you actually read through your statements regularly.
Ideally, you should know how much you spend on major categories like housing, transportation, groceries, insurance and entertainment. You should also be aware of how much you’re saving and if that savings rate corresponds to your goals.
How to Get Good With Money
Want to be better with finances? Here are a few places to start:
Start a budget
Creating and following a budget is one of the first steps to becoming better with your finances. By creating a budget, you can reduce your spending and increase your savings. You can start saving for long-term goals like retirement or short-term goals like starting your own business.
Use Mint to examine your current expenses and see where you can cut back to pay off debt and save more. Mint will notify you when you’re close to exceeding your budget and when you’re close to reaching your goals.
Don’t be afraid to invest
Paying off debt and saving money are fairly straightforward tasks for many consumers. If you want to pay off debt faster, just add more money to your monthly payment.
But investing is more complicated, so many consumers avoid tackling it. Unfortunately, if you don’t invest, you’ll likely never save enough to be able to completely retire. Learning how investing works and what options are available is a non-negotiable aspect of being good with money.
Be willing to learn
The world of personal finance is vast and ever-changing. Investing in cryptocurrency was unheard of for most people just a few years ago, and now it’s common practice. Before the 2018 tax law, homeowners often itemized their tax deductions. Now most consumers take the standard deduction.
Stay up to date with personal finance news by following personal finance influencers, perusing financial publications like Kiplinger’s Personal Finance and reading the latest money bestsellers.
If you want more personal advice, consider hiring a fee-only financial planner. You can find a trustworthy planner through the Garrett Planning Network, the XY Planning Network and the National Association of Personal Financial Advisors.
Becoming Good with Money Takes Time
Because most schools don’t teach personal finance and many parents don’t discuss money with their kids, it’s no wonder that most of us leave home without the financial skills needed to build a secure future. “I think too many people say that they are or aren’t good at money like it’s a natural skill, but it’s really something that can be worked on,” said financial planner Thomas Kopelman of AllStreet Wealth.
Becoming more educated about personal finance is like learning a new language. You wouldn’t shame yourself for not speaking French fluently after just a few classes, so don’t shame yourself for not knowing the difference between a personal loan and a payday loan when you’ve never been taught.
Save more, spend smarter, and make your money go further
Zina Kumok is a freelance writer specializing in personal finance. A former reporter, she has covered murder trials, the Final Four and everything in between. She has been featured in Lifehacker, DailyWorth and Time. Read about how she paid off $28,000 worth of student loans in three years at Conscious Coins. More from Zina Kumok
Visit the website of Zina Kumok.
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No matter how much or how little money you make, knowing how to manage it can make the difference between living paycheck to paycheck and being financially secure. Money management skills are an important part of being independent. To be good with money, you need to create a budget that allows you to track your expenses, establish an emergency fund, and pay off your debts. Then you can begin investing and build your wealth.
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Figure out your monthly income.[1]
This might be a simple or more complicated task depending on how you receive income each month. If you’re on a set salary, you probably get the same amount of money every month after taxes. If you’re on a freelance salary or paid hourly and don’t work set hours, it may be harder to calculate your salary.- Don’t forget to account for other sources of monthly income besides paychecks, including things like rental payments from tenants if you own properties; child support or alimony; social security payments, disability payments, or pension; or income from interest or capital gains if you have investments.
- Add up all the sources of monthly income and write down the total amount. This amount is your total income, and as you create your budget, all of your expenses cannot exceed this amount or you will go into debt. If your expenses are less than this amount, you will have money left over to save.
- Remember that paychecks are after-tax, and so the tax must be added back in to obtain gross income.
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Figure out your fixed expenses from housing and debt. Fixed expenses are those bills that come due in the same amount every month like clockwork. When you build a budget, these are the first things that you have to account for, because you can’t affect the amount or choose not to pay these expenses.[2]
- Fixed expenses from housing or debt can include your rent or mortgage payment, car payment, child support or alimony payments, or credit card or personal loan debt.
- List each housing or debt expense, and add them up. Housing and debt should account for about 30% of your budget. That is, if your monthly income is $5,000, your housing and debt payments should pay for no more than $1500.
- Housing and auto expenses should include taxes, insurance, maintenance, and fuel (utilities).
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Account for your taxes. Taxes are a huge expense, but many people fail to account for them in their budgets. You should account for state and federal income taxes, local and property taxes, and withholdings from your paycheck such as FICA and Medicare.
- Taxes should account for about 25% of your budget (if your income is $5000/month, your taxes should account for no more than $1250). For some people, it will be less and the additional money will be put into your discretionary fund to use on living expenses.
- Locate your marginal federal tax rate for the current year by visiting the IRS’s website at https://www.irs.com/articles/projected-us-tax-rates-2016.
- You can change your tax burden due each year by setting number of dependents to reduce or raise spendable income.
- Alternately, some people have more money taken out for taxes to get a larger, lump sum refund at end of year.
- The method that works best for you will depend upon your budgeting needs.
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Record your insurance costs per month. Insurance should include any insurance payments you must make for yourself or your dependents, including health insurance, life insurance, car insurance, and homeowners or renters insurance. However, homeowners or renters insurance is generally included in housing costs, so make sure not to count it twice.
- Insurance should account for around 4% of your monthly budget. If you earn $5000 per month, insurance should be $200 or less.
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Make a list of your variable living expenses, and put them into categories. Your variable expenses are costs that come up in different amounts each month. Variable expenses can include things like food, entertainment, clothing, pet care, the beauty salon, the dry cleaners, or other places you spend your money.[3]
You may also include any money you regularly put into savings or investments in this category.- For example, if you own a dog, you may typically spend $50 on dog food per month. But some months you may need to take the dog to the vet, groomer, or a boarding kennel, which can add to the expense of having a dog substantially. That makes pet care a «variable expense» for the purpose of your budget.
- The money left after your fixed and variable expenses are paid for is «Discretionary spending.» That means this is money that you don’t directly owe anyone but can decide what to do with each month on your own. It should be the remaining portion of your budget.
- For example, a variable expense is buying food for the month, whereas a discretionary expense might be going out to eat.
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Track your spending for several months. Tracking your spending will help you identify whether you are staying within these guidelines, or if you need to identify places where you can make cuts in your spending. If you spend more than your income each month, you’ll go into debt. But if you can come under your budget in any area each month, you’ll save money.[4]
- As you track your spending you may find that your budget may need a bit of tweaking depending on your personal circumstances— for instance, severe medical issues might make it necessary for you to spend more money on quality health insurance. That’s ok, as long as you don’t exceed your monthly income in expenditures.
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Set a goal for an amount of money to include in your emergency fund. This will vary from person to person, but generally an emergency fund should contain at least enough to cover four months’ expenses.[5]
If you want to be good with money, you need to have money to cover your unexpected expenses without putting yourself into debt.[6]
- Also, when you decide how much to include, you should take into account any dependents you might have and potential emergency needs they might have.
- However, don’t keep too much in your emergency fund. The money in an emergency fund must be liquid and therefore earns less than other investments with longer term. The excess over the emergency funds should be invested at a higher rate.
- For example, if you are single and living a pretty low-maintenance lifestyle, one month’s salary might be a good goal for your emergency fund. But if you are the sole bread winner in a marriage with three children, there is a lot more potential for «emergency» expenses among your five family members, so having several months’ salary is a better idea.
- Also keep in mind any special needs you or your dependents may have, or any precarious situations that might suddenly turn into big expenses. For instance, if you have an old car that might break down at any time, you are likely to have a sudden emergency expense. If your health or the health of your family members is poor, you might be more likely to have to fund an unexpected hospital stay.
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Add any unused money to your emergency fund at the end of each month.[7]
If you have extra money at the end of each month, you can put it into the emergency fund as savings.- If you find that you are able to live within your budget and still have some money left over each month, consider putting that money directly into your emergency fund account each month until you meet your savings goal. You can even set up an automatic account transfer to making saving easier; it will feel like you are just paying another monthly bill.[8]
- If you find that you are able to live within your budget and still have some money left over each month, consider putting that money directly into your emergency fund account each month until you meet your savings goal. You can even set up an automatic account transfer to making saving easier; it will feel like you are just paying another monthly bill.[8]
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Decrease your monthly expenses and put your savings into the emergency account. If you have no money left over each month, and you don’t have a good way to increase your income, you will need to decrease your monthly expenses in order to fill your emergency fund. This can be hard, but a few months of tight living can really add up in the long run.
- Look for areas in your budget that are discretionary or not necessary for you or your family to live. For example, you may have a substantial entertainment expense that could be cut down, or you may spend quite a bit on fashion, food, or a hobby.
- Try cutting expenses by not eating out as frequently, going to the salon every eight weeks instead of every six, buying less clothing, or not buying new games.
- You can also call service providers and try to negotiate for lower payments. For example, your cell phone service provider may offer you a lower rate if you call their customer service line and tell them you’re considering switching service providers.[9]
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Increase your income and add that extra income to your savings. If you don’t have any money left over at the end of each month to put into savings, you may need to increase your income in order to fill the emergency fund. This can be hard to do, but having an emergency fund is necessary to protect you and your family in an emergency.
- If you work as an hourly employee, consider working a couple extra hours every week, and putting that money directly into the emergency fund.
- If you are salaried, consider whether now might be a good time to ask for a raise in your salary. If you’ve been working at the same salary for a year or more and doing well at your job, your boss may be happy to comply.[10]
Put the extra income into your emergency fund each month. - If neither of these are options for you, consider whether you might pick up a few side jobs to earn some extra cash. Dedicate your weekends to a part-time job or small business venture, such as lawn mowing or dog sitting. It might seem small, but over time that money will grow to fill your emergency fund.
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Open a savings account specifically for your emergency fund. It’s important for your emergency money to be kept separate from your normal checking account so that you are not tempted to spend it. It also helps you to be able to keep track of exactly how much money is in your emergency account at all times.
- You can start the account with any amount of money you have available, although many banking institutions will require a specific minimum amount, such as $100. Some credit unions will allow you to start an account with much less, so check there if you are unable to meet the minimum for a savings account at your typical bank.[11]
- You can start the account with any amount of money you have available, although many banking institutions will require a specific minimum amount, such as $100. Some credit unions will allow you to start an account with much less, so check there if you are unable to meet the minimum for a savings account at your typical bank.[11]
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Don’t use your emergency fund for non-emergencies. If you are used to living paycheck-to-paycheck and suddenly have excess money in the bank, it may feel tempting to spend it. But being good with money means knowing when to save and when to spend, and your emergency fund should be saved for true emergencies.
- True emergencies include things like natural disasters, job loss, health problems and hospitalizations, unexpected court costs, funeral expenses, and other unpredictable troubles that could put you in a major financial hole.
- Remember, too, that «unplanned expenses» are not the same thing as emergency expenses. You might have an unexpected invitation to go on an expensive vacation, but that’s not a true emergency. If you can’t afford it on your regular budget, you should not dip into your emergency fund for anything that is not a true emergency.
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Evaluate your budget to see where you can cut back. In order to pay off outstanding debts, you’ll need some extra cash each month so that you can pay more than the minimum payment. Once you’ve established an emergency fund for your family, you should put any extra money into debt repayment until you are completely out of debt.
- The interest costs on debt is generally higher than what can be received on investments, so makes sense to pay off debt before investing.
- It’s ok to live on a tighter budget for a few years in order to pay off debt; living within your means is a huge part of being good with money.[12]
You can cut costs on entertainment, clothing, or your food budget. If there are no areas you think you can cut, but you still have significant debt to pay off, consider downsizing your home or trading in your car for a cheaper model.
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Prioritize your most expensive debt first. You might have one credit card or student loan debt with a very high interest rate— that makes it a more expensive debt than another loan with a lower rate, because you are forced to add additional money onto your repayment every time you pay the bill.
- Put your excess money each month into the debt with the highest interest rate until the balance is completely paid off. You will still need to make the minimum payment on all your other debts each month.[13]
- If you only have one major source of debt, then try to put as much extra money into each payment as you can each month. If the payment is $50 each month, try to pay $100 or even $200 or more. The more you pay on each payment, the faster your debt will disappear.[14]
- Put your excess money each month into the debt with the highest interest rate until the balance is completely paid off. You will still need to make the minimum payment on all your other debts each month.[13]
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Get government debt assistance. Various government programs can offer you help paying off your debts. Specifically, your student debt might be consolidated or forgiven through the Obama Student Loan Forgiveness program. Under this program, your student loans may be consolidated and refinanced to make payments more affordable. In addition, your loans might be completely forgiven after a period of 20-25 years or as part of public service loan forgiveness.[15]
- The government also has programs to ease mortgage debt, particularly for those affected by the housing crisis.
- HARP helps those borrowers who have experienced a decline in home value, while HAMP helps those who cannot make their monthly payments. Both involve refinancing your home and reducing payments.[16]
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Stop building additional debt. While you’re trying to pay off existing credit card debt, student loan debt, or any other debt you may have, you might simultaneously be using a credit card or taking out other loans. But this could just be adding more debt to your existing problem.[17]
- Use a cash-only system until your spending is under control. That will prevent you from going into additional debt if you are unable to pay off your credit card statement each month.
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Put any unexpected windfalls into your debt. If you happen to inherit a bit of money, receive a tax rebate, obtain a court settlement, or receive a bonus at work, remember your goal of being good with money and getting out of debt. Don’t let yourself imagine ways to spend the money; instead, immediately use the money to make an additional payment on your debt.[18]
- While a little vacation or a new outfit might feel nice in the short term, getting out of debt will set you up for success and reduce your longterm stress.
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Wait until you have established an emergency fund and paid off your debts. In most cases, you want to be sure you have a nice safety net in the bank (the equivalent of a few months’ salary) before you begin investing money. Similarly, you need to be sure your debts are paid off as soon as possible prior to investing any excess money you may have each month.[19]
- Investing can be a nice way to earn a bit more money, but its only a smart option if you can afford to lose the money you invest. An investment can end up making you money, but it can also end up costing you money, so it is a gamble you have to be able to afford taking.
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Save up for your first investment. Most experts recommend that beginning investors start with around $1000 on a first investment. That amount will pay a nice dividend if you make a smart investment, but hopefully won’t be too painful if you lose it in a bad trade. You can make investments in different amounts, but this is a good amount to start with.[20]
- If you don’t think you can spare $1000 for investing because you’re afraid you might need that money soon, that’s a sign you need to build a bigger emergency fund before investing.[21]
- If you don’t think you can spare $1000 for investing because you’re afraid you might need that money soon, that’s a sign you need to build a bigger emergency fund before investing.[21]
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Start simple. You might think that you need a fancy portfolio with lots of high-risk individual stocks in order to invest. But that’s not true. You can more safely invest money in mutual funds or exchange-traded funds (ETFs). These are simpler and offer less risk while you’re still learning the ins and outs of investing.[22]
- The benefit of mutual funds and ETFs is that instead of focusing your money on one stock, which could succeed or fail, they spread your money over many stocks— sometimes dozens or even hundreds. That means there is a lot less risk for you, since even if some of the stocks fail, you will almost always see some return on your investment.[23]
- Even if you’re investing in relatively low-risk securities, you should still diversify your portfolio to reduce your portfolio risk. Diversification involves placing your money in different investments, rather than throwing it all in one or two.
- It may be beneficial for you to engage in dollar cost averaging (DCA) so that you can invest the same amount each month. DCA involves regularly purchasing the same dollar amount of an investment.
- This means that you still invest the same amount each month, regardless of price changes.[24]
- The benefit of mutual funds and ETFs is that instead of focusing your money on one stock, which could succeed or fail, they spread your money over many stocks— sometimes dozens or even hundreds. That means there is a lot less risk for you, since even if some of the stocks fail, you will almost always see some return on your investment.[23]
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Expect to wait a while to earn returns on your investment. Investing is a longterm game, not a way to get rich quick. Some experts refer to a «seven year rule» that implies that you are likely to double your investment every seven years.
- The seven year return is based on a 10% rate of return on your investment, so if your particular investment has a higher rate of return, you’ll double your money faster. Of course, that also means if you have a lower rate of return, it will take you even longer— and you may want to look around for a new investment.
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Use a brokerage company, but choose the right one. Some fancy full-service companies will try to get you to put your money into complicated accounts without explaining the details to you. They may be taking advantage of the fact that you’re a novice investor, and these types of investments could end up costing you a lot of money.
- It’s often a good idea to choose a discount broker with low fees for your first investments. Many of these brokers will be able to offer mutual funds with no commission, which makes the process much more affordable for you.[25]
- It’s often a good idea to choose a discount broker with low fees for your first investments. Many of these brokers will be able to offer mutual funds with no commission, which makes the process much more affordable for you.[25]
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Get enough insurance. Even if you save carefully and watch your spending, an unforeseen event like a prolonged illness or lawsuit can decimate your savings. Reduce this risks by making sure that your insurance covers you adequately. For example, make sure that your homeowners policy covers total replacement of your home and possessions in the event of loss. In addition, make sure that the liability policy attached to it covers you adequately, because you don’t want to be sued over something that happened on your property. financial professionals advise $300,000 in coverage for this purpose.
- The same is true for your auto insurance. If you just purchase the minimum amount of insurance, you will be liable for any settlements or legal costs above that amount.[26]
- The same is true for your auto insurance. If you just purchase the minimum amount of insurance, you will be liable for any settlements or legal costs above that amount.[26]
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Reduce your insurance premiums. You can reduce your insurance premiums by increasing your deductible (the amount you pay when you file a claim). This is true for homeowners, auto, and health insurance. This means that you’ll be out for more money if you ever do need your insurance, but you’ll save much more each month as a result.[27]
- You can also reduce these types of insurance by making yourself a safer «bet» for the insurance company.
- For example, people with good driving records pay less in auto insurance and those with burglar alarms have a reduced homeowners insurance bill.[28]
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Drop insurance that you don’t need. There are, however, some types of insurance that are basically unnecessary. Extended warranties and credit insurance on loans, for example, are typically not needed, especially if you can cover the loss or your loan payments with your monthly budget.[29]
Add New Question
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Question
How do you avoid overspending?
Brian Stormont is a Partner and Certified Financial Planner (CFP®) with Insight Wealth Strategies. With over ten years of experience, Brian specializes in retirement planning, investment planning, estate planning, and income taxes. He holds a BS in Finance and Marketing from the University of Denver. Brian also holds his Certified Fund Specialist (CFS), Series 7, Series 66, and Certified Financial Planner (CFP®) licenses.
Certified Financial Planner
Expert Answer
You just have to be honest with yourself. Look at your monthly budget and note how you spend your money. Check to see if you are spending a lot on something you can cut back on, like eating out. Everyone is different, but most people have something they could cut back on in their budget.
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References
- ↑ Brian Stormont, CFP®. Certified Financial Planner. Expert Interview. 21 July 2020.
- ↑ Brian Stormont, CFP®. Certified Financial Planner. Expert Interview. 21 July 2020.
- ↑ Brian Stormont, CFP®. Certified Financial Planner. Expert Interview. 21 July 2020.
- ↑ Brian Stormont, CFP®. Certified Financial Planner. Expert Interview. 21 July 2020.
- ↑ http://www.bankrate.com/finance/savings/5-ways-to-grow-an-emergency-fund-2.aspx
- ↑ http://www.bankrate.com/finance/savings/5-ways-to-grow-an-emergency-fund-1.aspx
- ↑ Brian Stormont, CFP®. Certified Financial Planner. Expert Interview. 21 July 2020.
- ↑ http://www.bankrate.com/finance/savings/5-ways-to-grow-an-emergency-fund-4.aspx
- ↑ http://www.ibtimes.com/mobile-contract-negotiation-101-how-haggle-better-prices-your-carrier-1743683
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Today, you’re going to increase your money vocabulary with 42 words and phrases about money. Also check out Maths Vocabulary in English: Do You Know the Basics?
Like it or not, money is a big part of most of our lives.
So it’s important to be able to talk about it, right?
Here are 42 usfeul words and phrases to help you talk about money in English.
Words to describe physical money
Note
This is British English, and it basically means “a piece of paper money.” It’s short for “bank note.”
“I found a ten-pound note in the street the other day.”
“I tried to buy a sandwich with a fifty-pound note, but the shopkeeper wouldn’t accept it.”
Bill
“Bill” is the American word for “note.”
So we can talk about ten-pound notes, but we usually say ten-dollar bill.
My main question is “Who’s Bill?”
Coins
The money that isn’t notes — those shiny metal things? Those are coins.
Here’s something I’ve noticed about travelling:
In some countries, you end up with loads and loads of coins in your pocket. They just have so many of them.
The UK is one of those countries.
Shrapnel
This word actually means the small pieces of metal that explode out of a bomb or a grenade.
But when we’re talking about money, it’s a very informal way to describe coins.
But there’s a difference in how we use “shrapnel.”
The word “coin” is countable:
“How many coins have you got in your pocket?”
But the word “shrapnel” is uncountable:
“How much shrapnel have you got on you? I need to get a ticket, and the machine doesn’t accept notes.”
Change
When we pay for something, we do it one of two ways.
We can give the exact change: if the toothbrush you’re buying costs £1, and you give the shopkeeper £1, you’ve given the exact change.
But if you don’t have any shrapnel on you, you might want to pay with a five-pound note.
Then the shopkeeper gives you £4 in change.
Or perhaps you only have a fifty-pound note. So you try to pay for the toothbrush with that.
The shopkeeper just shakes his head and says, “Sorry, mate. I can’t break a fifty.”
What does it mean?
If the shopkeeper can’t give you the correct change for the fifty pounds because he doesn’t have it, then he can’t break the fifty-pound note.
And you don’t get a toothbrush.
Coppers
Most countries have very, very low-value coins.
What colour are they in your country?
Probably, they’re this dark orange colour — or copper colour.
That’s why we call them coppers.
Words to describe amounts of money
Fiver
This is British English, and it means “five-pound note.”
Easy, right?
Tenner
OK, you’ve guessed this one, haven’t you?
Yep — it means “ten-pound note.”
This only works for five pounds and ten pounds. We can’t say, for example, a twentier. It just sounds weird.
A lot of people I know (including myself) use these words when we’re outside the UK to talk about ten lira or ten lev or ten euros or whatever the currency is where we are.
K
I wrote about this in my big post on how to say numbers in English.
If you add “K” to a number in English, it means “thousand.”
Here’s an example for you to see how it works (and also to see how ridiculously overpriced things are in the UK).
These are beach huts:
They’re cute things that you’ll often find on the beach in the UK.
The idea is that you buy one and then you have a little room to change your clothes in, drink tea in and even have a nap in when you’re at the beach.
This one in the photo is in Brighton, my hometown.
Want to buy one? Well — they’re pretty expensive.
These guys cost over 20K.
Ridiculous, isn’t it?
Grand
“Grand” is exactly the same as “K.”
It means “thousand.”
“I still can’t believe those beach huts are going for over 20 grand each.”
Cash
Cash is real money — not virtual money.
If you’ve got bank notes or coins, then you’ve got cash.
If you’re using your card (or cheques, like it’s the ‘80s), then you’re not using cash.
Also — Johnny Cash. Because there’s never a bad time for Johnny Cash.
Words to describe currencies and denominations
Pound
I’m sure you know this one. It’s the currency used in the UK.
But just one thing: you don’t need to say “sterling.” No one uses it!
In fact, I had no idea what it meant until I was an adult.
Quid
You’ll hear this one a lot in the UK.
This is British English, and it means “pound.”
But be careful!
The plural of “quid” is “quid” (not “quids”).
So your kettle might cost one quid or fifty quid.
Which is really expensive for a kettle. Even a nice electric one with flashy green lights and everything.
Don’t buy it!
Bucks
This is originally American English, and it means “dollars.”
When I visited Australia back in February, I was pleased to hear that they use “bucks” there, too. A lot.
It feels good to say, right?
“That’ll be seven bucks, please.”
p
This is short for “pence.”
There are 100 pence in a pound.
It’s also the same in the singular and plural — so something could be 1p or 50p.
But prices can get a little tricky to say when they get more complicated. Click here for more on how to say prices correctly — it’s harder than you think!
Ways to talk about using the ATM
ATM
OK. What’s this?
Yep — it’s an ATM.
Cash machine
OK. What about this?
Yep — it’s an ATM.
But we can also call it a cash machine.
Hole-in-the-wall
And this? What’s this?
Yep — it’s an ATM or a cash machine or, if you’re talking to someone from the UK, a hole-in-the-wall.
But what can you do with it?
Withdraw
OK. You’ve got no cash on you, and you need to buy that amazing teapot — and you need to buy it NOW!
So you go to the cash machine and withdraw the cash you need.
Take out
“Withdraw” is quite a formal word.
In most situations it’s nice to use this phrasal verb instead:
“Give me five minutes — I’ve just got to go to the ATM and take out a bit of cash.”
Deposit
So we can use the ATM to withdraw money, but we can also use it to do the opposite.
When you deposit money, you take the real money you have in your hand, let the machine eat it up and watch the money get added to your bank account.
Put into
So “withdraw” is quite formal and “take out” is quite informal.
Also “deposit” is quite formal and “put into” is quite informal.
“Someone’s put about four grand into my account! Where did it come from?”
Ways to describe the money you get
Payday
This is, surprisingly, the day you get paid.
Maybe it’s every Monday.
Or maybe it’s on the first of the month.
Or maybe it’s NEVER! (That job was awful.)
Salary
Usually when people talk about their salary, they’re describing how much they get paid every year or every month or, sometimes, every hour — but only two of these are technically correct.
A salary is how much you get paid every year.
However, you’ll often hear people talk about a “monthly salary.”
And that’s fine, as the monthly salary is calculated based on how much you make in a year.
Wage
So how do we describe the amount of money you get per hour?
That’s when “wage” comes in.
A wage is usually used to describe the money you get for one hour’s work.
Most countries have a minimum wage, which is the smallest amount of money a company can legally pay their workers.
Income
This is the money you get over a period of time.
So we can talk about a weekly income, a monthly income or a yearly income.
But we actually use this word in lots of others ways.
For example, a way to describe poor families or rich families is by using the term “low-income household” or “high-income household.”
This is often used by people who work in sales. Probably because when you’re trying to sell stuff to people, it’s good to avoid the words “rich” and “poor.”
We can also use the phrase “on a six-figure income” (an income with six numbers, e.g., $500,000).
It’s basically a way to say you’re rich:
“50 quid for a kettle? No problem — I’m on a six-figure income.”
Words to describe paying less
Discount
Here’s it is — your dream toaster:
It not only makes toast, but can filter coffee, travel through time and also make your enemies do embarrassing things in public.
But there’s a problem. A predictable one.
It’s really expensive — completely out of your price range.
Then, one day, the shop decides to sell it at a much cheaper price.
In fact, they cut the price by 80%.
That’s an 80% discount.
Now you can afford it!
Go get that toaster!
Sales
There are some times of the year when the shops go crazy with discounts.
In the USA, there’s an event called Black Friday. And it’s absolutely mental and ridiculous.
Just for one day, the shops discount everything — a lot.
As a result, people start queuing outside stores one, two, even three days before the special day.
When the doors open, everyone tries to kill each other (almost) to get to the cheap, heavily discounted, stuff:
via GIPHY
(Really — is stuff that important?)
Anyway, Black Friday is a massive sale — a period of time when a shop, or lots of shops, have big discounts.
You also have closing-down sales, when shops are about to close down, and they want to sell everything they have left.
When you buy something at a discount because it was part of a sale, you can say it was “on sale.”
“Do you really want to buy that?”
“Yeah — I think so. Anyway, it’s on sale.”
Mates’ rates
Sometimes shops give discounts.
But so do friends.
Let’s say you’ve got a good friend who does awesome tattoos.
Everyone wants her to do their tattoos.
In fact, she’s the most popular tattoo artist in town and, as a result, she charges a lot of money for them.
But not to you — you’re one of her best friends.
You can get a tattoo from her at a much cheaper price.
She’s your friend, so she charges you less.
She does that tattoo at mates’ rates — a discount for friends.
Ways of describing having no money
We’ve all been there, right?
That time when you just have no money to spend.
There are a few ways of describing this.
Skint
This is British English and basically means “without money — at least for now.”
It’s an adjective:
“Coming to the pub?”
“Not tonight, mate. I’m skint at the moment.”
Remember — it’s usually a temporary situation (like the day before payday). It’s different from being poor, which is something more permanent.
Broke
This is basically the same as “skint” but, it’s used outside the UK.
Flat broke
This means “very broke — really — I have literally NO money!”
![[conversation] Hey, can you lend me a tenner? Sorry, I’m broke! OK, what about a fiver? No, I’m serious. I’m flat broke! A quid? [Punches him]](https://www.clarkandmiller.com/wp-content/uploads/2018/10/money-vocabulary-comic.jpg)
Ways of describing how much stuff costs
Pricey
You know that feeling, right?
You’re in a new city, and you’re hungry.
You see a restaurant that looks quite good — not too posh, so probably not expensive.
You sit down and look at the menu … and the prices.
Now — if the menu was really expensive you’d just leave, right?
But what if it’s only a bit expensive?
Just a little bit more than it should cost?
Well — you’d probably stay, wouldn’t you?
Even though the menu’s a bit pricey — a little bit more expensive than it should be. But only a little bit.
A waste of money
OK. All of a sudden, you’ve got a grand.
Quick! What do you spend it on?
You could spend it on a trip around the world.
Or you could put it in the bank and save it.
Or you could renovate your kitchen — it really needs it.
All good ideas, right?
Or you could buy that giant dog statue you saw yesterday.
Not such a good idea, right?
What? You went for the dog statue? Seriously?
You’ve spent the money on something stupid! It’s a complete waste of money!
A bargain
When you buy something, and you get a great deal. It’s much cheaper than expected.
Perhaps it’s a skiing holiday in France for less than 100 bucks.
Or a beautiful teapot for just a quid.
Whatever it is, enjoy it — it’s a bargain!
Ways of describing spending money
Splash out
Awesome! You’ve received a bonus 200 quid in your salary this month.
What are you going to do with the extra cash?
Well — you could save it.
Or you could splash out on that dream toaster you’ve always wanted.
“Splash out” basically means “spend freely.”
It’s usually for a special treat — something you wouldn’t usually buy because it’s a little pricey. But just this once. This is a special occasion! Why not?
Blow it all
You decide to sell your car because you realise that bikes are way better. (They are!)
So you sell it, and you get a good deal for it.
One day you have loads of money in your pocket.
So you take all your friends out for a big meal.
The next day you wake up and check how much is left.
Nothing! Not a penny!
You’ve blown it all!
When you blow your money on something, it means you spend a lot of money on something useless.
“When he was fired, the company gave him 20 grand. Guess what? He blew it all on a golden toaster. Unbelievable!”
Break the bank
This means “spend more than you should” or “spend more than you can afford.”
However, it’s often used in the negative to give a good reason for buying something:
“Well — it looks fun … and the tickets are only five quid.”
“Yeah! Let’s do it! It’s not exactly going to break the bank!”
Ways of describing not spending money
Stingy
Here’s Tony. You may remember him from my post on negative personality adjectives:
He hates sharing his stuff.
And he most certainly will NOT be buying you a drink anytime soon.
He’s stingy!
It’s basically the opposite of “generous.”
Tight-fisted
This is basically the same as “stingy.”
We can also shorten it and just say “tight.”
“Hey, Tony! Can you lend me a couple of quid? I haven’t got enough on me for the ticket.”
“No. Buy your own ticket!”
“Come on! Don’t be so tight!”
On a tight budget
Money’s a funny thing, isn’t it?
Sometimes there are good times, and we feel like we can afford pretty much anything.
And sometimes there are … not-so-good times.
Times when we need to be careful about what we spend.
Times when even spending a quid or two on a cup of tea can break the bank.
That’s when we’re on a tight budget.
On a shoestring budget
This is similar to “on a tight budget,” but we use it when we’re describing how much money there is for a specific thing.
I have a friend who decided to cycle from Istanbul to Manchester on a shoestring budget.
Some of the best films were made on a shoestring budget.
Get the idea?
OK, so that was a lot of money vocabulary — 42 words and phrases to talk about money in English.
But what did I miss?
What other words and phrases about money can you think of?
Let me know in the comments!
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We all know people who are ‘good with money’. Hopefully you’re one of those people. We all know people who are decidedly NOT good with money. Hopefully you can distance yourself from them when they ask you to cover for them yet again. But what does the phrase actually mean?
It means:
- Living within your means
- Paying your bills on time
- Having a nest egg for emergencies
- Saving enough during your working years to fund your retirement
Some folks seem to be good with money instinctively. Others struggle with the concept – money seems to burn a hole through their pockets and they’re always strapped. There’s less of a correlation between making a lot of money and being good with money than you might think. Some people make a lot but crash and burn fairly frequently; others don’t make much but live quite nicely with little financial drama.
Most members of the Credit Union want to be good with money. So, where do you start? Let’s take the four statements above one at a time.
First, track your spending. Don’t spend more than you make. No impulse purchases. It could mean you change shopping habits, clip coupons, stop the daily cup of coffee, change the thermostat, etc. Move from cash to using Internet BillPay or a debit card. Know how much is coming in and how much is going out.
Pay your bills on time. If you’re prone to forgetting, pay the bills as soon as you receive them. Float isn’t important in a low-rate environment. Never be late paying a bill or your credit score could suffer. A high score means better loan rates, better insurance rates, and paying lower utility and rent deposits. Online banking and mobile banking are available 24/7 so pay bills as soon as you get them.
Save every month. The nest egg for emergencies cannot be too big. Funds not needed for short-term emergencies can then be invested. Set up an automatic transfer into a savings account for every paycheck you get. You won’t miss the small amount swept into that savings account and you’ll be glad you have that nest egg when the air conditioner breaks or the car needs a repair. To save smaller amounts more frequently, ask about the Credit Union “save the change” program. Don’t save what you have left over every pay period. Rather, pay yourself first then spend what’s left.
Plan to retire comfortably. Contribute as much as you can to your 401(k), especially if a portion of those contributions are matched by your employer. Online tools can be used to project your retirement account accumulation and projections. The experts at the Credit Union’s Financial Planning Center can help.
Are you good with money? Whether you are or not, your Credit Union can help. The people at Day Air are good with money and part of our passion is financial education. Our mission is to enhance the financial well-being of our members, and that means helping you become better with your money. Stop by a branch and talk with us. We’ll help you along the path of becoming better with money than you already are.