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| Helpful Hints | July 2005 |
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How to Manage Your Money |
| Do you wish you knew where your money was going each month? Somewhere along the line you get a paycheck, and then, boom, it's gone! Where did it go? How can you get your financial situation in check so that you can rest assured that you and your family will have the money you need when the time arises? Well, like so many other things in life, you need a plan. Perhaps you never had a class that talked about budgeting and your parents weren't good at it either, so you don't even know where to start. Well, the best place to start is by making a list. Write down all your required expenses for one month; this should include house payments, electricity, gas money, food, etc. Only write the things you MUST have to live. If it's something you could feasibly live without, do not write it down. After you list everything, add up the total for one month. This is the amount of money you must make each month to meet your basic needs. After you know how much you must budget for your basic expenses, write down how much money you should have left at the end of each month. Now, you want to make a budget for the things that aren't required. Plan in some money to have fun with your family, add a little extra money to paying off debts or putting back for retirement or college. Decide exactly how you want to use that extra money. Do you want to give each family member an allowance to use for that month? Do you want to save money for a large purchase? By the way, you should always keep enough of savings to cover three to six months worth of basic expenses; that way if something should happen to cause you to leave work, you will have the money to keep a roof over your family's head and food on their plates. If you can't bring yourself to undertake these simple steps, or if you have any problems getting through them, you may want to sit down with a financial planner. A financial planner's goal is to help you set up your budget so that you know exactly where your money is going and that you are happy with its destination. If you come up with a budget, make sure you adhere to it. If you don't, the whole process of learning where your money is going was useless. Plan and stick to the plan. You'll find yourself managing your money instead of the other way around. |
Martin Divalut Martin Divalut knows the importance of understanding and maintaining a balanced budget to a healthy financial future. He is the director and cooridinator of Figures and Money, an excellent website containing information and details related to money. |
