3 Signs Your Money Management Skills Need an Overhaul

Think you do a good job keeping tabs of your money? You may need to think again.

The better you are at managing your money, the more likely you'll be to have healthy savings and a reasonable amount of debt (as opposed to an unhealthy level). But if you're not careful, you could end up with a string of dangerously high credit card balances and a world of financial stress. Here are a few signs you're not doing the best job of managing your money -- and what to do about it.

1. You don't know what your bills cost you

You might think you spend $300 a month on groceries, but what if you were to look at your bank and credit card statements from the past year and see that most months, your total tab is closer to $400? Would that shock you? If you don't know what your various expenses cost you, then you can't accurately manage your paychecks. And that's a problem.

The solution? Get yourself on a budget. List your monthly expenses (using accurate figures you get by combing through those bank and credit card statements) on a spreadsheet or find a budgeting app you like. Then check in on your budget monthly to make sure you're following it. If you find that you need more spending room in specific categories, you'll have to cut back in others to allow for that. But that's a far better solution than continuing to be in the dark about what your bills really cost.

2. You're living paycheck to paycheck

It's not uncommon to find you can't pay your bills, including unplanned ones, until your next paycheck hits your checking account. But that's not a healthy way to exist. There's a high risk you'll take on debt if a bill comes in higher than expected or unanticipated expenses, like car repairs, arise out of the blue.

The solution? Build an emergency fund. Ideally, you should have enough money in savings to cover three to six months of living expenses. If that's not feasible in the near term because you have no money in the bank at all, at least save something. Sock away enough cash to cover a month's worth of bills, or to pay for a $500 surprise expense. Then focus on working your way up from there.

3. You're regularly late with bills

Paying your bills late could seriously damage your credit score, since your payment history is the single most important factor that goes into calculating that number. You'll also needlessly spend money on fees and charges if you're late with your payments.

The solution? First, get on that budget to ensure you have the funds to pay your bills. Next, automate your payments. Many billers will allow you to set up automatic payments so you don't risk forgetting to write out a check or make an online payment. It's an easy way to avoid a headache.

If your money management skills could use some work, fear not. A modest effort on your part could set you on the right path and help improve your financial picture as a whole. Remember, too, that getting better at managing money is a work in progress. The more effort you put in, the more those skills stand to grow.