If you have a complicated relationship with your personal finances then you’re not alone. It doesn’t matter whether you have a highly-paid job or you’re working for minimum wage because earning money is only half the battle. It’s the question of how you should save, spend, or invest your earnings that confuses and agitates so many people. You want to increase your wealth, but you don’t want to put your money at risk. You want to organize and plan your expenditures, but you’re worried about unexpected costs. These are things that we all think about, but there’s always a way to give yourself a financial safety net. If you’re trying to learn how to use your money more effectively then this article should give you some useful ideas.

Track your expenditures.

As mentioned in the introduction, your income doesn’t determine how financially stable you are. The way in which you use that income is what will determine your present and future financial stability. You need to think beyond today. Blowing your funds as soon as you’ve earned them is not a long-term way of approaching your personal finances. You need to track your expenditures so as to ensure that you’re living within your means. Spend less money than you earn and you’ll never have to worry about going into the red or having to borrow money to make ends meet. Not all debts are bad, of course, but you should only be borrowing money if absolutely necessary (a loan for college or a house deposit) and not to bail yourself out as a result of bad spending habits.

Tracking your expenditures is easily done if you plan them out. Make a budget that takes your monthly earnings into account and calculate how much of those earnings you need to set aside for the essential costs in life. Think about groceries, electricity, water, and rent; those are things you can’t live without, so you need to make sure they’re covered every month. Once you’ve calculated that cost, the money remaining is all excess. But that excess doesn’t need to be blown on luxury expenditures (we’ll talk about the ways in which you could use it throughout this article). If you’re struggling to cut down on the luxuries then try the 30-day rule. If you still want a luxury item 30 days after first seeing it then you can buy it. Most likely, however, you’ll have forgotten all about the item and avoided a costly impulse buy. It’s a neat trick, and it always works.

Cut down your cost of living.

We talked about tracking down your expenditures and avoiding excessive luxury purchases in the last point. However, you might still struggle to make ends meet even with a budget, a steady stream of income, and avoiding everything but the bare necessities. Still, there’s a lot you can do to cut down your cost of living without having to give up anything important. Think about all the ways in which you currently spend money. You could save money at home by turning off lights, cooking in bulk, insulating your walls, and double-glazing the windows to trap heat more effectively; these things will reduce your energy bill. You could save money on groceries by growing vegetables at home and avoiding the big brands. Get a little creative with your lifestyle because we’re all guilty of spending a lot of money on essentials which have cheaper alternatives.

Invest your money.

Of course, if you want to increase your wealth through methods other than cautious spending and saving habits then you might want to look into investment opportunities. Investing your earnings is smarter than letting them slowly gain interest in a bank account. You could look into the property market because a lot of investment beginners see a sizeable return by buying a property, renovating it, and selling it for a higher price. Still, you might want to start with something more manageable. You could check out this automated trading system if you’re looking for tools to get you started in the world of trading. Investments always come with an element of risk, but doing your research will put you in a good position.

Always put some earnings aside.

We’ll end on the most important point: you need to save money for the future. This isn’t just about creating a retirement fund but an emergency safety net in case some unexpected and costly event ever arises in your life. You need to be sure that you always have some financial backup plan in life. That’s why you can’t just live from paycheck to paycheck. You should set up a standing order that automatically transfers a portion of your income to your savings account on a regular basis. That way, you’ll have a slowly growing savings fund that you won’t even have to think about.