We all need to juggle a lot of financial responsibilities. More so if you are a parent or you have a family so can meet the household’s everyday expenses, unexpected bills and save for the future.

Here are top five tips to effectively manage your finances.

Understand Your Financial Situation and Set Priorities. To better manage your money in a better way, you need to know how much you have. You need to have a list of your cash flow, your regular monthly income, savings, investments, and all expenses. With your current financial condition, determine what your priority is. Your budget for food is a good example of an expense that is a priority. It is also something that you can adjust if you have more important bills to pay. There are probably some items on your grocery list that you can remove to save money for other bills.

Create a Budget. Start planning and create a realistic budget. This will help you manage household expenses and decide on how to control your budget. Expenses can be fixed (tithes, mortgage payments or rent, utilities, property taxes, school fees, health or car insurance) or variable (food, home maintenance, car repair, medical and dental fees, holidays, gifts, entertainment). To start, you have to list what you earn, spend money on and something you owe. Your budget will help you spend money wisely on your needs or things you must have, save money for things you want or the things you like, and set aside money for unforeseen expenses. Some use the 70-20-10 rule. This means – spend, whether for wants or needs, 70% of the earned money, save 20%, and use 10% for tithes. Others call this the concept of “Save, Spend, Share”.

Avoid Bank Charges. It is important to make sure that you only spend within your means. Try to avoid bank charges and interest fees. You need to consider that personal loan fees and charges add up to the cost of borrowing money. There’s the monthly interest charge, processing fee, and documentary tax fee. Other common banking fees includes maintenance or service fee, out-of-network ATM fee, insufficient fund fee, and wire transfer fee.

Prioritize Debt. If you owe money in a loan, make sure that these are pay off as quickly as you can. Paying down debt, is one key to financial success. Debts have higher interest charges that add up to the loaned amount. Unless addressed appropriately, debt will continue to grow. Check out online resources, tools, and programs, like debt consolidation, that can help you manage and eventually clear your debt.  Once you are totally out of debt, commit to staying out of debt. 

Establish an Emergency Fund and Start an Investment. Part of managing your finances well is to have cash set aside for unexpected events such as a lost job, an illness, or a broken car. It is recommended that emergency money will be able to cover for three to six months of expenses. The best way to create this fund is to always include savings in your budget. How much you can save depend on how much extra money you have available. It is recommended to set aside at least 10% of your income into emergency savings each month.  

There has been no better way to grow money than through investing. Investing helps you make your money work for you because of compound earnings. It means that any revenues you earn are reinvested to earn additional earnings. The earlier you start investing and doing it over a long period of time, the more benefit you gain from compounding. You’ll be able to grow your money slowly as you invest more every year. It is also helpful to check within your family and friends to discuss about investments that will fit you. I’m thankful that I have mom as my financial adviser for my insurance and investments.

Applying there easy tips will help reduce your financial stress, change your lifestyle, and transform your financial condition.