Mastering your personal finances is a challenge for everyone, and the tips to do it should be taught in every school across the world. Believe it or not, nearly 25% of Americans don't have anything stashed away for emergencies.

If you fall into that category, or if you're even close to it, then you could benefit from a money management course! Luckily, we've got you covered.

If you're ready to start saving, let's dive into money management 101!

Money Management 101: Know Your Goals

Setting financial goals is so important, and there are two types of goals in the financial world. They're broken into short term and long term. Short-term goals are ones you want to achieve within the next year or two and should be at the forefront of your mind. Long-term goals require careful, steady planning and execution but are even more consequential to get right or wrong.

Short-Term Goals

Short-term financial goals are like paying off credit cards or hitting a monthly savings goal. While they aren't as critical individually as long-term goals, if you're able to nail these almost every time, it makes planning for long-term goals a lot easier and more achievable.

Not only will hitting your monthly savings goals add up to huge amounts over time, but clearing debts will save you a fortune. Credit cards and other short-term loans like payday loans have huge interest rates. Just on your credit card, if you have a pretty standard interest rate, you could be looking at an additional $2,500 on a $10,000 balance if you're only making the minimum payments over just one year, so manage your cards wisely!

Paying these down will save you big. For lower-interest loans, let's say you have three years left on your car payment. Digging that down to two years and refinancing halfway could save you some money and free you up from that payment for an extra year of debt-free car ownership!

Long-Term Goals

Let's use three prominent examples of long-term goals, as they're the most common, most expensive, and most important to get right: your mortgage, student loans, and your retirement.

Your student debt should be the first one you want to go. Student loan debt is just a burden, and it's likely hindering you from working on or even starting the other two. If you have more than 5 to 10 years left on this, increase your payments by as much as possible. If you have this debt and you're still renting, it's even more critical. When you have rent, it's hard to save for a home without paying student loan debts on top of the situation. So, treat student loan debt like your credit cards and get it paid down as quickly as possible.

Make your mortgage tight, but don't suffocate yourself. If you're sure you can afford a 20-year mortgage instead of a 30-year, do it. The last thing you want is to reach retirement age and continue to pay your mortgage out of those funds.

Then finally, there's the big one. You want to retire. Remember that. If you're planning on being in good health through your 60s and beyond, then you should be planning on retiring. Social security isn't enough to live on; at this point, it's a known fact. You will need a pension or a retirement fund.

Even if you have a pension, we've all heard horror stories of people losing them and having nothing later on. Have a retirement fund, see if your employer can match your contributions, and increase them as your salary increases. You'll be glad you did because 1 in 4 Americans have nothing saved up for retirement.

Budget

If your retirement account is being funded directly out of your paycheck, then you'll only need to worry about the rest. If not, make sure you open one yourself and contribute to it regularly.

Necessities like rent or mortgage, food, and utilities should cover about 55% of your budget. All the bills you know you're going to have to pay in the month, including your transportation to work, should be calculated out. Try to keep these around 55% or under for proper budgeting.

Ideally, you want 10% to 15% going to your savings. That's for overall savings, future house down payment, and emergencies. So plan for that in your budget.

The rest is a little more lenient. Try to keep overall "fun" money down to about 15%, but 10% if you can. Anything else should go toward education for you or your family, retirement, paying off debt, and anything else that will benefit your financial health like saving or investing!

Have Emergency Funds

Starting an emergency fund can be done in several different ways, depending on your finances. You can use your general savings account for emergencies, as is traditional, or you can save separately for this.

Are you an Uber driver? Do your riders sometimes give cash tips? Put the cash in a jar for emergency funds. Have a side gig? Put a quarter of it away. Are you a regular employee? Have a few percent of your paycheck go into a separate account.

There's no actual limit to how much you should save for emergencies. So many things could go wrong where a huge expense pops up. Your basement floods, you lose your job, you get an unfortunate health diagnosis, or your roof caves in. These can happen to anyone, so plan for the worst and hope for the best!

Whatever money you do put away for emergencies should be used only for that. Don't even think about it being there. Just keep adding to it, and you'll know if the time comes when you need to use it. Does the emergency you planned for never come? Great, you'll have peace of mind for the rest of your life then!

Consider Your Tax Situation

If you're an employee who is used to receiving a tax refund every year, then consider changing your status. Remember, a small return is a good thing. It means you got your money when you were supposed to get it. However, if you use your refund to add to your savings, there's nothing wrong with that!

If you are self-employed, it gets trickier. Depending on the number of business expenses you have, saving 10% (separate from other savings) of your gross revenue should be around enough to cover the bill at the end of the year. Keep in mind, that's just a general rule of thumb, and you likely know better about your situation than we do.

Suppose you save 10% and owe 5%, great. Toss it in your savings or keep it for next year. If you save 10% and wind up owing 15%, then you aren't far enough from it to be financially ruined. If you have limited expenses for your business, like a freelancer who works from home, then try saving more, even up to 30% for taxes!

Reduce Expenses

Cancel subscriptions you don't use, refinance your loans, and stop eating out so much. Those three simple steps could add up to save you a fortune that you could be putting toward your long-term financial health!

Look for any ways you can save money. Try using coupons at the grocery store, earning points at the gas station or your credit card, and look for anything you're paying for that you don't use.

Increase Your Income

We can talk all day about limiting your deadweight expenses, but the best tip we can give you is to increase your income, and even if you're scratching your head, we promise that there are many ways to do this.

Asking for a raise at work is an excellent way to increase your primary source of income. If you've been working at your company for a while with no raise. Then this is a great strategy.

Get a side hustle! This tactic can be anything you want or anything you're good at! Many of us have degrees or skills that aren't relevant to the field we entered, so why not put them to use? If you're skilled in graphic design, try doing it on the side! Have a car or a bike? Try delivering with DoorDash or something similar! This strategy is a great way to increase your income, and you can put a lot of it toward your savings goals or use it for spending money if you're already hitting them!

Watch It Grow

Alright, you've completed money management 101, so take what you've learned and don't just ponder it. Sure, the content of this article are excellent ideas in theory, but they're a lot better in practice! Keep up to date with our latest financial news, check out some common financial mistakes to avoid, and do your best to secure your financial future!