How to Manage Money And Make More Money

14. June 2017

The different ways to manage money and increase it through investments is of the best things that I learned through my work in finance. This post won’t be about risky investments though, today we will talk about very simple ways to make the most out of your income.

How to manage money

Check your score

One of the most important thing and that very few people actually do is to check your credit score. This is important because at the moment you really need a loan you won’t be surprised by a bad score. By the way, you can easily build your credit and here are a few tipps:

  • Get your own place and all your mail going to your address: most people don’t know that but having a place outside of parents home is a sign that you can afford life and getting your mail (especially bills) going to your registered home shows that you manage your finances.
  • Have only one credit card: I know that in countries like the USA it is common to have different credit cards. This isn’t helpful if you are trying to build your credit score. The best thing to do is pay your bills and stick with one. Also, try to manage it on a monthly basis.

Monitore your account

This is an easy way to manage money! Keep an eye on your account and check and double check every money that is leaving it. In this way you won’t have any bad surprises such as paying for a service you already quit.

Maximize your earnings

You don’t need to buy stocks to maximize your earnings, there are very easy ways to do so:

  • ISA Accounts: Individual saving account is a tax free way to save money as you don’t have to pay income tax on the interest you get.
  • Switch between accounts: Some banks actually pay some amount for customers that open an account with them, this is a easy way to get from 50 to 150 bucks.
  • Compounding interest: It is the interest calculated on the initial amount and the accumulated interest from previous deposits. It creates a multiplyer effect, especially if you leave the money there for a few years. You may believe you won’t make but check it out:

Interest compounded half yearly – added at the end of each six month period

Base amount: $1,000.00

Regular Money Deposited Monthly: $200
Interest Rate: 2%
Effective Annual Rate: 2.01%
Calculation period: 5 years

Courtesy of

Watch your spending and spend below your means

This aspect is often underestimated. But imagine you spend $5 daily in coffee. If you saved this money you would have $150 after a month, $1825 after a year. Now imagine you decide to save this money for 5 years, you would have $9125 + interest! This is a clever way to manage your money.

Find a strategy

Imagine your income is $2000/month after tax.

Now imagine you need about $1000 to live: You pay $500 for your room in a shared apartment and the rest $500 goes to food, phone, gas and other bills.

Now, after everything is paid you still have $1000. Most people would take the money and go spend on restaurants, clubs, trips but imagine if you tried something new:

Your income: $2000

50% of your income goes to housing and everything you need to live, $1000 total.

12,5% you will put into a savings account, $250 total.

12,5% you will invest long term, $250 total.

25% is your budget to spend on yourself (Clothing, beauty, fun, further education), $500 total

BTW: If you put $250 every month for 10 years at a savings account with 2% interest (interest compounded half yearly) you would get in the end €33,220.91!!!

I know, who likes budgeting? But this is the easiest way to know how much you need to spend. If you are on a saving budget, try ask yourself before buying anything “Do I need it or do I want it?”.

I hope you liked these tipps and that they can help you to make the most of your income and savings. It doesn’t really matter how much you can save, the most important thing is that people are prepared for the future and are smart about money.



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