Earning and saving are two important components of managing money. Learning how to budget is an essential skill needed to master financial literacy.  Many people have difficulty with these skills; however, there are ways to develop the tools to manage money efficiently and effectively.

Payment Options

One of the most effective and efficient ways to work with money is to pay bills on time. One way to pay bills is with a credit card. Finding a company that will accept credit card payment can be helpful. Since credit cards allow you to pay for items in advance, there is time to save, which ensures the payment can be made. However, when the invoice is received, it must be paid in full by the due date. If you do not pay the invoice, interest accrues and the bill becomes more expensive.  Some credit card companies offer attractive point incentives that can be used towards trips or gas cards. Using a personal checking account is another common way to make payments. This method allows you to write a check to pay for items. The cost of the items is deducted directly from your checking account. Therefore, your account must have enough money to pay for the items. If a check is written but your account cannot cover the cost, the bank will charge you an overdraft fee.


Budgeting is a smart way to save and keep track of money. A budget allows you to set aside cash to spend and save. Making a list of your bills and how much you owe each month can help you allocate the funds necessary to make payments. Keeping up with payments is imperative. If you do not pay bills on time, you may lose access to your smartphone, car, or electricity. Understanding how much money you make compared to your expenses allows you to prioritize your spending. Paying the mortgage or rent takes precedence over going out to dinner or buying expensive clothing. Using smartphone apps and websites can also help manage money by giving advice and monitoring spending and saving.


The key to managing money is understanding how to save. Setting financial goals and prioritizing needs and wants is an excellent way to create a savings baseline. A car is a necessary expense since earning money is often tied to mobility and being able to work. Cutting out expensive bad habits such as smoking is another way to budget, help you save money, and create a more healthy lifestyle. Taking time for yourself is important to reduce stress. Vacations can help minimize tension, but can also be very expensive. Creating a slush fund can help you save for a trip. A slush fund allows you to allocate your money towards something you want, helps you to plan, and make good financial decisions. You are also less likely to make an impulsive decision to purchase a vacation that you cannot afford. Saving is critical to ensuring you’re a financial success.


Investing money requires preparation, research, and patience. When investing your money, it is important to establish long-term and short-term goals. Putting money away for retirement allows you to prepare for the future. Once you reach retirement age, this money can be taken out and used. If you are a parent, it is never too early to invest in a college fund. College tuition is constantly increasing and waiting until the last minute to try to save can cause stress and tension. College funds are used specifically for education and cannot be taken out until your child is of age. Making smart, practical investments ensures you are getting the most bang for your buck.

Learning the steps of basic financial literacy is a necessity. Following these steps helps to establish the building blocks that can help you learn how to manage your money carefully. Managing money can be difficult; however, establishing goals and having patience are recipes for financial success.