They say that money isn't everything. Yet we need enough of it to live well in this world, and so managing your own personal finances well is a skill that always pays dividends. Read on to find out how you can do this.  

Pay off your loans 

Loans can be great when helping out of a jam, but except for your car loan and your home mortgage, having multiple debts can drain your finances and make keeping on top of all the admin harder to handle. 

With that in mind, paying off any loans apart from the ones mentioned above is the best approach. If this isn't possible right now, then consolidating your loans into a single debt can help. This is because you will only have one payment to keep on top of each month, and many consolidation services will ask for a lower monthly payment, which means you can maintain your standard of living while paying back your loans at the same time. 

Start saving 

Once all your debts are in order it's time to start saving. Indeed, a good rule of thumb is to save at least 10% of your salary each month. This can then be used to create an emergency fund. Money that will cover any unexpected expenses such as when your car breaks down or your washing machine leaks. 

Start investing 

After building up enough savings for an emergency budget, you may wish to consider investing some of your money. The benefits of investing are that you can make a much higher return on your money than you would get with a savings account. Indeed, the average long term return on investments such as shares tends to be around 9%. 

However, this benefit is only possible because of the additional risk associated with investing your money. This means you could lose it, as well as make money on it. The good news is there are ways of reducing the risks involved such as making sure that you only work with providers that have the proper legal entity identifier registration, and that you do due diligence on any investments before you decide to go ahead. Additionally, diversifying your investments can help protect against sharp market falls, and allow you to act before you lose all your money. 

Change your money mindset 

Often, before we can truly have a handle on a problem in our life, we need to change how we think about it. So it is with money, and I invite you to sit down and think about any unconscious ideas or rules you have about spending. 

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A great way of doing this is to take your last three months of spending and notice any problem areas. Then ask yourself why you made those purchases, had to pay those fees, or signed up for those subscriptions. Once you get the first answer keep asking yourself why until you get to the core emotional issue that is governing your spending. It usually only takes about 5 ways to do this, and after you have this information you can better recognise and deal with this issue without resorting to mismanaging your finances.