Personal Money Management Story

I remember always being worried when using my ATM card when buying something.  In my mind I was wondering if I had enough money in the account to make the purchase or if my purchase would be denied and I end up embarrassed while walking out of the store empty handed. Since I focused on developing my personal money management acumen and no longer have those worries.  I feel confident plus now I’m saving money each and every month.

Like myself, most people do not have a working budget in their pain extra each month for things like overdraft charges bounced checks and other issues that arise when you don’t know how much money you have.  Since programs that teach money management for college students and kids are not shared with students, most people get a little off course with their finances. This is especially true when making larger purchases like deciding to rent a place or when purchasing a car. But it also affects those day-to-day purchases that we make.

If you currently don’t have a written budget in place I want you to take care of that today. This is the first step in building our personal money management foundation and it will save you money, reduce stress and make managing your money much easier. In the calculator section there is budgeting software that will allow you to easily create your own budget. When you’re going through that exercise please don’t forget about those annual expenses. You want to make sure to start save for them on a monthly basis so divide the yearly cost by 12.  This will give you the monthly amount you should be saving. So things like car registration that you have to pay once a year you want to start save up a little each month so when the bill comes you are surprised with a big expense.

Now if you like most of us each month there’s money that is spent and you have no idea where goes.  If you find yourself in the situation you want to start tracking your day today expenses. An easy way to measure this is just to use cash for all your transactions over 1 month.  Take out a a few hundred dollars cash and see how many days it last you.  Continue this process through the month and see how much you have spent. I have known people that were able to purchase a car just by cutting back their daily coffee and lunch purchases.

See a good personal money management plan isn’t meant to restrict your purchases it’s there to help you cut down your spending on areas that aren’t so important to you see so you can spend money on those areas that are important to you. Plus you are able to instill good money management for kids and others that you influence.  For example if you love taking a weekend trip every other month but are unable to afford it now and you see your spending a few hundred dollars a month on extra cable channels and eating lunch out, cut down on your cable and start bringing a sack lunch to work. Then go take that weekend of vacation that you would truly enjoy.

Most people forget that budgets not only help us save for the long-term things like retirement paying for kids college or buying a home. They also help us save money for those fun things that we want to do. Now when you first start saving your first savings goal is to start building an emergency fund. In other word, money that will protect you in case anything happens like a car breaking down or getting laid off from work. You want to make sure you have at least two months emergency money set aside as soon as possible. Even if you’re in debt you want to make sure you have this cash on hand rather than using all that money to pay down your debt. This will give you added protection and security.

Once you have a few months saved up you can progress to other savings goals like paying off your debt and increasing your emergency fund. Ideally you want to have at least six months emergency money on hand. I know that may sound like a lot but when you reach this amount you will feel much more secure.  Once you have that saved up you can begin to consider investing your money and get it growing for you. I encourage you to get to this point because wouldn’t it be nice if your money management plan isworking for you instead of you having to work for every single dollar?

So right now I want you all to complete your savings plan and budget that will help you reach your financial goals. Also for those in debt create a plan to pay off your debt. By following the strategies shown in the notes section-‘budget tips for those in debt’- and you can save yourself 5 to 10 years worth of extra payments just by knowing the most effective way to pay off your debt. That could be 5 to 10 years worth of extra money in your pocket. I congratulate you for taking the time to improve your personal money management situation, follow the steps outlined in this section you will feel more confident secure and you spend more time doing those things that you enjoy.