By: Maria Williams

Money management is a crucial skill, yet far too many people seem to lack it. A recent study from Marketwatch found that 66% of Americans live paycheck to paycheck, including 48% of those who earn over $100,00 per year.

This can put many in a precarious financial situation, making it difficult to cover emergency expenses or invest for the future. 

Ramsey Brock, president of Brock Asset Management, explains that those who follow critical practices for better money management can be in a more secure financial position to make lasting positive changes.

1. Set a Timeline for Financial Goals

Regardless of your financial goals, Brock recommends that individuals start by setting a specific timeline to guide their planning. “Whether you’re planning for retirement or trying to get out of debt, making your financial goals as specific as possible is a surprisingly powerful step,” he explains. 

“A timeline for your goal — such as eliminating all of your non-mortgage debt in two years or saving $2 million for retirement by the time you turn 65 — requires you to get into the specifics of how you will actually accomplish that goal. By identifying how much you need to save or invest for these goals, you can then break your plan down into yearly or monthly increments and strategize accordingly.”

2. Look for High-Growth Saving Opportunities

Building an emergency savings fund is a common money management suggestion. Generally, the recommendation is to build up a savings fund that can cover three to six months of living expenses. But many actually leave money on the table with how they set up their emergency fund.

Brock advises, “To make the most of your savings, make sure you are putting your money in a high-yield savings account. Many high-yield savings accounts deliver four to five percent interest, which can add up quite a bit over time. Building your emergency fund in a high-yield savings account allows that money to go to work for you and earn additional money so that you are better prepared for when you need it.”

3. Choose Boring Investment Opportunities

When it comes to investing, Brock suggests that investors should take a “boring” approach.

“The idea of timing the market perfectly with how you buy and sell is exciting, but it usually doesn’t work out in the long run,” he explains. “Investors are generally better served by a less exciting strategy — but one that is also much simpler and easier to manage. A diversified investment portfolio with a risk level that is in line with the timeline for your financial goals doesn’t need constant tinkering. Instead, you can just set up regular contributions, regardless of market conditions, and have confidence that you’ll enjoy steady long-term returns.”

According to Brock, historically, the S&P 500 has delivered an average annual return of over 10%, reflecting the long-term performance of the broader market. Many investors consider the performance of indices like the S&P 500 when considering different investment options. Understanding these historical averages can provide valuable insight into market trends, helping individuals make informed decisions about diversifying their portfolios and managing risk over time.

4. Use Cash to Control Spending

While credit cards and mobile wallets are convenient, high credit limits and the intangibility of paying via card or app can make it all too easy for individuals to overspend. In fact, studies have found that 58% of consumers are likely to spend the most money when using a credit card, including being twice as likely to make impulse buys compared to when they use cash.

Using cash may feel old-fashioned, but it helps make your purchases more real. When your spending is limited to the money in your wallet, you reduce your risk of building up excess credit card debt that would be hard to pay off. Even if you cannot use cash for all purchases, consider starting by using it in categories where you are prone to overspending, such as entertainment or groceries.

5. Take Advantage of Opportunities

Finally, Brock recommends that individuals look for opportunities that can help them maximize investment opportunities and find ways to save money.

“Many employers offer matching contributions to your 401(k), up to a set amount,” Brock notes. “The more you can contribute to your 401(k), the more your employer will add — essentially doubling your contribution. This is money toward your retirement; with the power of compounding interest, it can make a significant difference. Similarly, consider investing that money into your investment portfolio if you use a credit card with a cash-back program. This can turn that money into additional portfolio growth.”

Brock also advises that individuals look for savings opportunities, such as overlooked health insurance benefits or special savings programs offered through work or organizational memberships. Such savings can free up space in one’s budget.

Use Wise Money Management to Secure Your Financial Future

As Brock’s insights reveal, many of the most effective ways to improve your money management are relatively simple. Yet, they are often overlooked. By integrating these wise financial practices into your own life, you can gain greater control over your financial situation and be better positioned for short-term and long-term financial success.

Published by: Nelly Chavez