Money Management

Managing money is a skill that requires practice to perfect.

With the right financial tools, you can attain your goals and plan for the future, no matter what your level of income may be.

Learning How to Manage Money Wisely

Are you struggling to pay bills on time, and always feel like you’re running out of cash? These are telltale signs that you need a solid goal-oriented plan for managing your money. Not having goals means your money doesn’t have a purpose, which can lead your budget astray from investing in what’s most important to you.

Here are a few steps on how you can manage your money, get on the track, and finally free yourself from financial worries:

Step 1: Identify Your Goals

Good money management starts with identifying and setting goals.

Why? Because goals give you purpose, and not just for the way you live but also for how you spend your money. Goals are dreams – and if specific enough, they can motivate you to balance saving and spending to achieve them. It also helps you keep the things most important to you in perspective.

Take a moment to think about your financial goals. Then, once you’ve done that:

Determine the timeframe for each goal (e.g., less than a year, 1-2 years, or 5+ years)
Determine how much money you’ll need to reach each goal
Determine how much money you’ll need to set aside every week or month to achieve each goal within the desired timeframe

Next, it’s time to create a realistic and workable budget.

Step 2: Develop a Realistic Budget

For the planned period of your goals, you need to know what money you’ll have available.

This includes compiling all household monthly net income – from wages, pensions, commissions, and more.

Contrastingly, you’ll need to estimate your expenses – including fixed payments, contributions and all other predictable expenditures. If this isn’t easily accessible, look at receipts and old bills for a refresher. As a baseline, if budgeting is new for you, keep a record of your spending for a few months and revisit it.

By compiling your daily expenses, you establish a baseline so, moving forward, you can re-evaluate as you go for a happy balance between saving and spending!

Step 3: Evaluate

Your budget may need to be adjusted and change over time based on goals as you reach them.

Included in this may be expenses of all shapes and sizes – from candy bars to emergency medical trips. For the best money management and budget, make sure you’re listing everything in your budget booklet (Monthly Budget Tracker).