Have you ever struggled to determine how much you should save, figure out how many bank accounts you should open, or decide on whether you should use a debit or credit card? You’re not alone!Learning how to track your spending, invest your savings, and choose the right type of bank account can be challenging, but not impossible. Here are three points to consider when managing your finances

• How can you create a budget?

There is a plethora of budgeting plans out there, with experts weighing in on the merits and flaws of each. One popular example is the 50/20/30 Rule. This plan allocates your income into three different categories:

1- Essential expenses

Essential or mandatory expenses covers everything from rent and utility bills to food and childcare. Basically, expenses that you need to pay in order to survive. According to the rule, 50% of your income (after tax) should go toward these essentials. It could also be extremely helpful to open a current account and deposit your money there. This will help you pay any bills you need to online using a debit or credit card. A current account will also help you keep track of your spending and give you a clearer idea where your money goes.

2- Savings and debt payments

According to the 50/20/30 budgeting rule, 20% of a person’s regular income should be deposited into their savings or used to pay off loans or credit card debt. A great way of saving your money is to open a savings account, which allows you to saving right away, no matter the amount. Unlike current accounts, savings accounts earn interest, which means your savings will grow without any extra effort. You could invest your money in funds, stocks, or bonds, or visit your bank and look into saving your money in a CD, or certificate of deposit, which will freeze your money for a certain amount of time while generating a fixed interest rate. You could also look into investments or savings with compound interest, which generate interest upon interest, meaning that the earlier you start saving, the more your funds grow.

3- Wants

The final 30% of your income should be allocated to the “wants” category, and yes, it’s exactly as it sounds: anything inessential, or anything you “want” but don’t “need,” falls under this category. Clothes, subscriptions, restaurants, etc. all belong to this category.

Many other budgeting plans exist other than the 50/20/30 Rule. Some people prefer the “envelope system,” which involves calculating your average expenses each month, and allocating a certain sum of money to a labeled envelope that should cover that expense. Others gravitate toward the 80/20 plan, which unlike the more detailed 50/20/30 Rule, merely recommends that 20% of your income go into your savings, while 80% should be used to cover everything else.

• How many bank accounts should you have?

While choosing the right budgeting plan for you is of paramount importance, budgeting represents just one aspect of financial management. Another important part of managing your money is learning not just how much to save but where to save your money. We talked a little above about both current and savings accounts, but how do you know what kind of bank account is right for you? And just how many bank accounts should you have?

According to Forbes.com, “Your [current] account acts as the gateway to your monthly finances.” A current account is useful for a number of reasons: it’s great for receiving your paycheck and usually comes with affordable fees and a low opening balance requirement.

A second current account could also come in handy, especially for business-related finances; however, many consider opening a savings account to be more important, as you could use it to separate your daily expenses from the money you want to put aside for bigger goals, such as buying a home or car or going on a much desired vacation.

Keep in mind, however, that too many bank accounts can result in substantial fees, inability to keep track of all your money, and difficulty reaching minimum balance requirements. Write down your financial goals and set a solid financial plan to help you determine exactly how many accounts you need.

• Debit or credit? That is the question…

Choosing whether to use a debit or credit card ultimately comes down to your spending style, financial goals, and lifestyle requirements.

When it comes to daily expenses, many debate the pros and cons of using a debit card versus a credit card. When it comes to credit cards, many are attracted to their convenience and the many perks and benefits they offer, most credit cards offer greater protection than debit cards. Most installment plans also require a credit card. However, if you are generally not good at controlling your spending, credit cards can quickly lead to debt and accumulated debt interest.

Debit cards, on the other hand, can protect you from falling into debt, seeing as you can’t spend more than what you have in your account. Most debit cards also don’t come with annual fees and are generally easier to track spending with, but that also means you won’t be able to unlock the rewards and benefits you typically receive with credit cards. You will also be restricted in what you can or cannot purchase.

There’s no one-size-fits-all right or wrong when it comes to financial management. Every individual has different needs and lifestyle demands. Sound financial management is determining what’s right for you and what will help you get closer to achieving all your goals and dreams.