When money is tight due to an impending layoff or your living costs seem to be growing out of control, getting a better handle on your personal finances is necessary. If you can turn that into a permanent improvement in your money management skills, then you’ll surely be grateful for the extra money in your pocket and the reduced stress that comes with that.

Here are a few ways to make your management of money better so it’s less of a problem in your life.

Preparing a Home Budget

When preparing a home budget, you want to ensure you don’t forget anything major or it’ll be wrong, and you’ll run out of money too fast. Using a home budget calculator makes the whole thing easier because you can see the most popular categories of spending and slot in what you spend every week, bi-monthly, or monthly. It’s less likely that you will forget an important spending category because they’re listed there for you.

One thing to be careful of when creating your first home budget is not to forget the periodical payments. That could be an expense you have every three months, bi-yearly, or yearly, like an insurance payment or a gym membership. These are easy to forget and cause problems for your budget when they’re not planned for in advance.

Try the Envelope System

The envelope system relies on your home budget and lets you put the right amount of cash in a series of envelopes. You write on each envelope what category of spending it is for, e.g. food, gas, gifts, or something else.

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The advantage of using an envelope system is it puts back some self-discipline into how you spend your money. You have set a budget for each category in your home budget already; the envelope system just prevents you from spending more than the cash in the envelope. If you’re going to use this system, be sure to place the envelopes securely hidden in your home (or use a home safely) to keep the money safe.

Having proper management skills will help you have a more peaceful life. Here are some tips to help you achieve that goal. Which ones are you using?

Go Cash Only

Another way to get better at managing your money each month is to spend only cash for most purchases. By using cash and not plastic to pay for all your shopping trips, it makes the money that you’re spending seem more real. We live in a debit card and credit card world where paying by card separates us from the reality that we’re handing over cash dollars for things, some of which we don’t really care much about. There’s some good research that shows people spend up to 20 percent less when they go cash only on their spending.

Allocate All Your Money

A home budget can also help you allocate every dollar before it’s spent. By giving every dollar a home, including savings, so that you have a zero balance in your budget, it should keep you on track because you know where every dime is going.

Any plan to improve your money management relies on your setting a realistic budget, not leaving anything important out of it, and keeping to the plan for where you’ll spend your dollars. As long as you can keep fairly close to the spending plan, then your financial life will begin to show steady improvement with each new paycheck that comes in.

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Talk to me in the comments, please:

What are some ways that you practice money management?