Make Money

Paid Surveys

Side Hustles

Passive Income

How to Manage Money in 2021: 19 Tips to Do it Right

DollarBreak is reader-supported with the goal to become the ultimate practical resource for making money online. When you sign up or buy through links on this post, we may receive compensation. Disclosure.

Best Money Making Apps

Branded Surveys

Branded Surveys logo

$1 sign up bonus

$0.50-$3 on average per survey + Branded Elite Program – extra points for active members

Average survey length is 15 min and minimum payout is $10


Lifepoints logo

On average, earn up to $20 each month

Survey times vary – 10 min to 20 min

Surveys are available in 40+ countries


PrizeRebel logo

Most surveys pay up to $1. Earn as much as $50 each month

Up to 30% for referred user earnings

Rewards are sent in 24 hours and payout threshold is only $2

19 Best Ways to Manage Money

1. Set Up the Right Bank Accounts

The very first step to managing your money the right way is to set up the right bank accounts. 

Checking, saving, and investment accounts are the main parts of your financial success because you need to separate your spendings from your savings. Simply leaving your savings into your checking account makes it easy for you to accidentally spend it. 

And since your savings may decrease in value over time due to inflation, it’s always a good idea to invest a portion of your money. If you’ve never invested before, don’t worry, as I’ll talk more about investing later in this article.

Now, separating your accounts may sound tricky at first, but fortunately, most financial entities, including Acorns offer checking, savings, and investment accounts in one place.

Acorns Summary

  • Invests spare change automatically
  • $5 sign up bonus
  • $5 Min account investment
  • Average of 7.5% return on your investments

2. Set Short-term & Long-term Financial Goals

Setting financial goals is a smart step when we’re talking about managing money. Having financial goals makes it clear what you’re looking to achieve and lets you plot a course of action accordingly.

First, separate your short-term goals from your long-term ones. While you’ll need to reach some goals ASAP, other goals might have an end date a decade later. 

However, regardless of when your due date is, it’s always better to start moving towards your goals sooner than later. Especially when it comes to money.

Let’s see the examples of short-term and long-term financial goals:

Short-term Goals

Goal #1 – Say, your short-term goal is to build an emergency fund that can cover 3 months of your living expenses. You can reach this goal by creating and following a budget, as well as by cutting unnecessary expenses.

Goal #2 – If you want to keep your new credit card charges limited to what you can pay off in full, pay off your existing credit card balances first.

Long-term Goals

Longer-term goals may include:

  • Saving for your child’s education
  • Saving for a home down payment
  • Starting saving at least 10% of your salary every year for your retirement
  • And the list goes on…

Note that both short and long-term goals are different for each person. So give yourself some quiet time, take pen and paper, or open a spreadsheet and write down your financial goals.

3. Create a Budget

Creating a budget is a challenging, yet essential step to managing your money the right way. Budgeting helps you plan your spendings and strive towards your financial goals.

Let me break down how budgeting can help you manage your money better and introduce you to the best budgeting rules.

The whole purpose of budgeting is to lay everything out in front of you so you can see your cash flow, meaning:

  1. How much money comes into your pocket
  2. And where your money is going.

Once you visually see and realize these 2 things, you’ll be able to make some tweaks to meet your financial goals.

I would recommend taking a piece of paper and listing all of your incomes and your expenses side by side. Alternatively, you can also use an Excel sheet or a Google Spreadsheet to track down your income and expenses.

50/30/20 Budget Rule

One of the most common ways to analyze your current cash flow is to apply the 50/30/20 budget rule.

With this rule, your goal is to distribute your expenses the following way:

50% of your after-tax income on essential costs like:
– Food
– Utilities
– Rent/mortgage 
– Car payments
30% of your after-tax income on other needed expenses like:
– Phone bill
– Streaming plan
20% of your after-tax incomeshould go to savings:
– To build your emergency fund
– Save for retirement 
– Save up for a down payment on a house or your next car

While you can create a budget by yourself, there is a range of budgeting apps that can help you stay on track with your money.

Pro tip: If you feel like you can’t afford to apply the 50/30/20 budget rule to your income, maybe it’s a good idea to consider a side hustle? Or push for that promotion at your day job?

4. Give Yourself a Limit for Unbudgeted Spending

Having a certain amount of money left after you’ve subtracted your expenses from your income is a critical subject.

You can of course spend the extra money you’ve left on entertainment and fun, but you can’t go crazy with it. So limit yourself the amount of money you can spend on fun. This simple limitation will save you so much more in the long term than you can imagine.

5. Understand Your Income

When we evaluate our income, we usually refer to the gross annual salary we’re getting. However, it’s crucial to understand your net or take-home pay. This amount is exactly what you have available to put towards your budget and expenses.

Net income = gross income – taxes and other automatic deductions from your salary. 

Understanding your real income will help you a lot when you make financial decisions – big or small. 

6. Diversify Your Income

Financially educated and wealthy people never depend on one stream of income. They usually get money from multiple sources.

It’s because things happen. You might wake up one day just to find out that your office has closed, or that you’ve been fired for some reason.

Having your income diversified is good for 2 reasons:

  1. It adds up to your day job
  2. You’re still left with income in case you lose your job

Now, you might be thinking, “but I’m not wealthy, how can I diversify my income?”. 

In fact, you have a range of options you can acquire to increase your income while not being dependent on your day job. 

Let’s take a look at some of the best options to diversify your income:

7. Understand & Track Your Expenses

Maybe you don’t make large purchases that often, but small purchases here and there add up quickly as well. And before you know it, you’ve overspent all your monthly earnings and now you’re desperately waiting for the payday again.

If you can relate to this situation, you definitely need to track your spending. Saving your receipts and keeping a spending journal will help you discover places where you may be unknowingly overspending.

While Personal Capital is a full-featured investment manager, it also offers a great budgeting feature as well. Specifically, Personal Capital tracks and categorizes all the expenses you make with your debit or credit card. The app then creates charts that showcase your monthly cash flow and the breakdown of your monthly expenses.

Personal Capital Summary

  • Provides a complete financial view
  • Advanced retirement tools
  • Fees – 0.89% to 0.49% for accounts over $1 million
  • Has extensive tax optimization strategies

8. Cut Back on Expenses

Once you understand where your money flows, it’s easy to identify unnecessary expenses and cut back on them.

But that’s not all, you should also make sure you’re paying the best prices on services you get on a recurring basis. For example, you can reach out to your internet provider and negotiate your bills, or get apps like Trim, Truebill, and Billshark to do it for you and help you with managing bills.

Pro tip: Always look for discounts, cheaper alternatives, and coupons to save even more.

Trim Summary

  • Identifies unwanted subscriptions and cancels them for you
  • Negotiates with service providers to minimize your bills for you
  • You’re paying Trim from the money they have saved you so you don’t have to pay them out of your pocket
  • Is a secure app that doesn’t share your financial information with other parties

9. Don’t Commit to Any New Recurring Monthly Bills

It’s not always easy to resist loans, especially when bank sales representatives call you to notify you to qualify for a good deal. However, just because your income and credit qualify you for certain loans, it doesn’t mean you have to take them.

When you’re trying to manage your money better and meet your financial goals, you don’t need another recurring monthly bill that will suck money out of your pocket.

10. Limit Your Credit Card Purchases

Credit cards are the reason many people get off track of their financial goals. It’s so easy and tempting to turn to your credit cards when you run out of cash, that you don’t even consider whether you can afford to pay the balance or not. 

This article is all about managing your money the right way. So I’d highly recommend you resist the urge of using your credit cards for purchases, especially for items you don’t really need.

11. Pay off Costly Credit Card Debt

Paying off costly credit card debt is one of the best things you can do to improve your financial situation.

If you have a FICO score of 660 or more, you can use Tally App to give you a lower interest rate. Tally uses your FICO score to understand your credit score, analyze which credit cards you’re using to give you a credit line, and find the offer with the lowest interest rate.

What’s more, Tally helps you get out of debt and pay off your credit cards quickly, and never get a late payment fee.

Tally App Summary

  • Easy management of different credit cards – depending on your credit card issuers, their APR, and amount, Tally will make it easy for you to organize them in one place.
  • One monthly credit card bill – regardless of the number of your cards, one payment covers them all.
  • Late fee protection – Tally will settle your payments 2 days before your due date, so you don’t get charged an overdue fee.
  • Tally recommends a personalized payment plan based on your spending habits.

12. Build an Emergency Fund

Unfortunately, things happen and life might throw large expenses our way when we least expect it. Make savings a habit and you’ll notice that you’ll feel more secure having an emergency fund in place.

Whether you just lose a job or get into the hospital, you never know when these unpleasant events might happen. That’s why it’s always a better idea to get prepared for the worse and build an emergency fund.

So set up a separate savings account and make it a priority to put money into your emergency fund each month. Typically, most financial advisors recommend you save 3 to 6 months of expenses in your emergency fund. However, some people feel safer when they save up even more.

Having an emergency fund prepared, you won’t have to worry about the financials, rather focus on the emergency at hand.

13. Save for Retirement

While saving for retirement may seem unnecessary, especially at a young age, it’s recommended to get started as early as possible. Why? Obviously because the earlier you start saving, the bigger your retirement account will when you retire.

There’s no general rule of how much you have to save for retirement as it entirely depends on your preferences. However, financial experts recommend having 6 times your salary in your retirement account when you’re 50, and it’s good to have 10 times your salary by your late 60s.

And the best way to save for your retirement is to use retirement accounts because they give you significant tax breaks. 

If your job offers retirement accounts, such as  401(k) and 403(b) plans that you can contribute to, make sure you take advantage.

But don’t worry in case your employer doesn’t offer retirement accounts as you can always contribute to your retirement account (IRA for short). Many brokerages like Rocket Dollar, Acorns, and Stash offer individual retirement accounts.

Since saving for retirement might be a challenge, let me show you some key steps you should take at different life stages. 

In Your 20s

  • Save at least 10% of your gross salary (15% is even better). If you can’t commit 10% yet, you can start lower and increase the percentage over time. But if you wait until your 30s, you’ll need to save 20% or more to reach your retirement target, so it’s better to start saving in your 20s.
  • Take advantage of the retirement saving bonus if your employer offers it. Typically employees are “auto-enrolled” in this, but I still recommend you talk to your human resources manager to get the maximum contribution match.
  • Check out IRAs if you have no workplace plan. One of the best brokerages offering IRAs is Rocket Dollar. Plus, it allows you to invest your retirement savings to grow your savings even more.

Rocket Dollar Summary

  • Flat account fee – $15 for Core account and $30 Gold account per month
  • A great variety of assets you can invest in (stocks, bonds, IRS asset class)
  • Easy to start – you can set up and open an account in just 10 minutes
  • No minimum initial investment

In Your 30s

  • Aim to contribute at least 15% of your gross salary.
  • Don’t cash out when you change jobs. Cashing out is the worst move since you’re not only taking the risk of spending that money, but you’ll also get a 10% IRS penalty and income tax. Simply leave the money where it is or consider a 401(k) rollover.

In Your 40s

  • Prioritize retirement over other large payments like college fees. Now, this doesn’t mean you shouldn’t pay your children’s tuition fees, but you need to choose things. For example, choose a college that fits your budget.
  • Follow your budget. Along with increasing your earnings, your spendings will probably increase as well. But don’t forget to keep track of your expenses and don’t overspend your budget.

In Your 50s

  • Do you have 6-7 times your salary saved up already? As financial experts say, those are the numbers you should be targeting in your 50s.
  • Consider consulting a certified financial planner. While it’s perfectly okay to strategize for your retirement savings yourself, you might as well consider hiring a pro to work through your retirement plan.

In Your 60s

  • Do you have 8-10 times your salary saved up? If the answer is yes, you’re on the safest side.
  • Consider not to claim your Social Security right away. While you can start collecting your retirement money from the age of 62, every month you delay earns you a higher eventual payout. Financial advisors recommend waiting until 70 – by this time, your payout will be 76% higher.
  • Consider continuing working so you don’t need to withdraw your retirement funds yet.

14. Start Investing: Invest for Retirement with a Long-term Focus

Investing is the key to building long term wealth since long-term investments can lead to amazing returns.

But where do you start? Below I’ll list and review 3 of the most lucrative options to invest your money in.

Invest in Real Estate

Real estate has always been one of the most lucrative and low-risk investment assets. Now you might be thinking that it takes too much initial investment to purchase an investment property. 

However, that’s not the case anymore. Fundrise and Roofstock have made it more affordable to invest in real estate.

Minimum investment:$500$5,000
Annual return potential:8% to 12%7% to 19%

Fundrise is a crowdfunded investment platform that allows you to buy a fraction of the property. Let’s say you’re interested in a property that costs $100,000 – obviously, you don’t want to buy it at full price. But with Fundrise, you can invest for $500 or more and still get a return on your investment when that property sells out for profit or gets rented out.

Fundrise Summary

  • $500 minimum initial investment
  • Historical annual return varies from 8.8% to 12.4%
  • Low annual fees: advisory – 0.15%; management – 0.85%
  • High investment diversity

Another great platform that allows you to invest in real estate with relatively small amounts of money is Roofstock. Roofstock allows you to buy residential properties that come with tenants. This way, you have a guaranteed source of income instead of hoping to find tenants yourself.

Roofstock Summary

  • Lower-cost way to purchase rental properties
  • Option to Invest in real estate properties already with tenants
  • Over 500 new transactions a month
  • Open to non-accredited investors

Invest in Stocks

Investing in stocks is another great idea.

What’s great is that contrary to conventional opinion, investing in stocks isn’t just for rich people. 

In fact, the Stash app allows you to start investing with as little as $5 and expect an annual return of 16% or higher.

Stash Summary

  • Start investing with as little as $5
  • Buy fractional shares of stocks in companies like Amazon or Apple
  • Set automatic deposits on either a weekly or monthly basis into your account
  • Only $1 monthly fee (for accounts under $5,000) or 0.25% annual fee for accounts over 5k

Invest in Cryptocurrency

Cryptocurrency is increasing in popularity and becomes one of the most attractive investments for many new and established investors alike.

If you’re a beginner, you’re probably wondering where to start. The good news is, brokerages like eToro and Coinbase help you as a beginner to succeed and allow you to invest with a low initial investment.

Minimum investment:$50$2

Etoro Summary

  • 15 cryptocurrencies that you can trade 24/7 – including major coins like Bitcoin, Ripple and Ethereum, but also minor ones like eos, Iota, Tron and Tezos.
  • Easy-to-use website and mobile app
  • Great community for cryptocurrency traders
  • Social trading that allowing you to copy successful traders’ portfolios

Coinbase Summary

  • Offers more than 30 cryptocurrencies
  • Low minimum of $2 to fund your account
  • Relatively low fees
  • Your cryptocurrency is insured if anything happens to Coinbase

15. Shop Smarter

Shopping smarter is perhaps one of the most important steps to manage your money. 

Obviously, cutting down unnecessary purchases is the key to saving money. However,  there’s another way to shop smart and it’s using cashback apps

And the best thing about cashback apps is that most of them reward you when you do your regular purchases like groceries, gas, home goods, and more. 

Basically, cashback apps offer various rewards for shopping, including:

  • Discounts 
  • Special deals
  • Cash-backs 

Shopkick Summary

  • Get $5 Free by earning 25 kicks within your first 7 days after sign up with promo code: DOLLARBREAK5
  • Possible to make $1 or more per trip to the store (meaning scanning multiple items in one go)
  • $1 bonus for referring friends to download Shopkick app (up to $100)
  • Gift cards from Amazon, Best Buy, eBay, Groupon, Nike, Walmart, Paypal, Sephora

16. Compare Insurance Options

Insurance can be expensive, especially if you’re using an all-encompassing service. But it’s one of the essential bills in today’s world, meaning it’s not really a smart move to just cancel it.

However, what you can do is check out and compare different insurance options or providers at least once a year. And if you find a better deal, just go for it.

What’s more, in addition to the basic packages like healthcare and car insurance, consider insurances like:

  • Homeowner insurance
  • Renters insurance
  • Life insurance
  • Disability insurance

These insurance packages are considered to save you money in the long term by getting you prepared for emergencies.

17. Shop Around for Big Purchases

When you consider buying something big like furniture, a car, or even real estate, make sure you shop around.

For example, when you’re shopping for a car, don’t just accept the first quote. Instead, check out different car dealers to compare their prices and deals and make sure that you’re getting a good deal.

Pro tip: If you can, save money for big purchases instead of using your credit card. This will avoid you paying high interest on your credit.

18. Borrow Smart

Maybe you’re avoiding taking credit as much as you can, but sometimes that might get tricky and you might need to borrow some money.

In that case, try to borrow smart, meaning only borrow what you truly need and can afford. 

For example, say you’re looking to buy a house. The lenders are focused on telling you the maximum amount of money you’re allowed to borrow. Mostly, it might be a higher amount than you actually need and lenders have no clue or interest in telling you the lower amount. That’s why it’s your responsibility to negotiate with lenders and only borrow the money you need.

19. Build Your Financial Knowledge

Financial education is the key to your financial success. However, neither schools nor colleges teach us how to manage money.

Fortunately, there are unlimited resources on the internet, including personal finance blogs, podcasts, and books. So you can easily teach yourself money management skills and create your own money management strategies.

Two of the most valuable personal finance books include:

  1. Why Didn’t They Teach Me This in School?: 99 Personal Money Management Principles to Live By
  2. Rich Dad Poor Dad

The content on is for informational and educational purposes only and cannot replace any professional financial advice.
Conduct your own research and seek the advice of a licensed financial advisor. Please read the full Terms of use and Privacy Policy.