Money, money, money…
I don’t think we talk about money enough. It’s taboo for some reason and I don’t understand why, especially in these days when people are so obsessed with making more of it, personally and professionally.
First, I have to tell you that this post was motivated by 2 things:
- A dream I had where I sold my SUV and bought a hooptie so that I can pay off some debt. In the dream, I was riding around in my newly obtained car that people were laughing at as I drove by and I remember feeling embarrassed and ashamed of it and even considered going back into more debt by getting a new car because I didn’t want the ridicule. When I woke up, I realized how much we are influenced by what other people think about us. #EyeOpeningDreams
- I recently reread Total Money Makeover by Dave Ramsey because one of my goals this year is to get rid of 3 pieces of debt – a car loan and 2 credit cards. Reading that book has ramped up my excitement on money matters!
So I’ve been talking about money at home a lot lately and now I’m talking to you. Let’s talk money!
Money Management. A Survival Guide.
All money management survival guides will tell you the exact same thing. There’s only one way to be profitable in business and in life: make more money than you spend.
Ha! Sounds so obvious that it’s ridiculous to have to say it, but think about how many people really don’t make more than they spend. They often carry huge amounts of debt and see no end to the financial stress.
The ‘B’ Word
Budget. Yep, it’s never going away. One thing I’ve found that helps tremendously with effective money management is creating AND sticking with a budget. Lately, I’ve been using Every Dollar for my household budget and I love it. It’s free so check it out if you’re not already using a tool.
If sticking with your budget seems like a challenge, here are some simple ways to tackle it with more tenacity.
Note: Some of these methods I’ve borrowed from Total Money Makeover!
5 Tips for Staying Within Your Budget
- Put your credit cards away. It’s so easy to forget the true costs of the things you buy when you just swipe your card. Don’t feel guilty about falling for this trick; the easiest way to stop this behavior is to keep your cards hidden away. Don’t put them in your wallet at all! Only bring them out when they’re truly, truly needed.
- Make Envelopes. I did this last month with my teens in an effort to teach them budgeting and money management as well and so I can make sure they know how to shop on a budget. I made a grocery budget for all of us and everybody got an envelope with a specific amount and off we went. The kids actually enjoyed the exercise and found it a really cool challenge. As an added bonus, it got them thinking about the types of foods they’re eating too. So grab a stack of envelopes, mark each one with a designated expense, and put in your allotted allowance for each expense. It’s easy to stay on track when the money for your spending items is pre-counted.
- Use Cash. This is something I just started doing. I used to NEVER have cash on me. But now I realize how well it helps me see the true value of what I’m spending by using cash more often. In addition, my mom and I have a challenge to see who has the most change saved at the end of year so using bills and getting back coins will help me win! If you don’t like carrying around money, you could opt for using your debit card but please remember to stay on top of your balance so you don’t overdraw your account.
- Cut Back. Oftentimes, you don’t even know where your money is going until you start to track every penny and realize you’ve been spending too much in certain areas. I, for one, was spending too much on eating out and entertainment. So now that I know how much I’m spending, I choose to cut back and set a budget for those items. And, believe it or not, there are a lot of ways you can cut back on spending without even feeling much of a difference.
- Homemade Gifts. There are just way too many holidays, weddings, baby showers and other celebrations throughout the year that traditionally are met with gifts. If you’re tight on cash, don’t forget about homemade, personal gifts. These gifts are most often considered more thoughtful than anything you could have purchased.
While consuming things can make life fun, our society is caught up in the cult of consumerism. People are driven to spend every last penny they make, especially if they see others with the latest trendy “thing.” They are now enticed to spend more money on discretionary goods and services like going out to eat instead of cooking, taking elaborate vacations or weekend getaways, more elaborate stereo systems, giant-screen TVs, a larger house, a new car, a boat… the list is endless!
If you want to have money for something that will really add quality to your life in a lasting way, some part of your money must be set aside either in savings or investments and you must keep your expenses to a minimum.
Don’t get caught up with what The Joneses have. You can’t live their life, only your own. So learn how NOT to worry about what others have going on. As a matter of fact, be happy for them. Learn to love what YOU have, be grateful for it all, and keep striving to increase your earning potential so you can live the life you want too.
Side Hustle Anyone?
Got more month at the end of your money? Sounds like it’s time to create some extra income! What are your strengths, talents, skills? What can you monetize? Starting a side gig, or beefing up the one you already have, can be one of the first ways to create extra income.
How to Strengthen Your Money Management Skills
- Get clarity. Smart money managers are those who take the time to understand their finances, research ways to cut expenses, and communicate with their families about why it’s necessary to talk about money. By exercising control over your money and determining if you really need to buy something, you will suddenly see extra money in your bank account at the end of every month.
- Tweak and tweak some more. It’s always a good idea to tweak and reevaluate your money management skills. The world of money can be a huge task to manage which can get overwhelming at times. However, with clear goals and careful calculations (and seeking professional assistance when needed), you can adopt a manageable system that works well for you.
- Set realistic goals. It’s important to be realistic when setting out new money management goals for yourself. You shouldn’t do anything too drastic too quickly. It’s best to take on changes in stages and ease into new situations to help you avoid shock!
- Give yourself an allowance. If you tell yourself you can’t spend any money, you’ll get frustrated and you’ll be more likely to revert back to old habits. Instead, give yourself a monthly allowance. Tell yourself that you can spend $50 to $100 each month on the things you enjoy. You’ll have some fun and save money at the same time.
- Local staycations. Take more recreational trips closer to home and see your hometown through the eyes of a tourist. Man, we had such a blast rolling through St. Louis like we were new to the city. We saw and learned so much of the area we’ve lived in all of our lives. Going on an adventure doesn’t have to cost an arm and a leg.
- Think twice. If you need to finance something that’s not an absolute necessity, think twice about it; take better care of what you have now so you don’t need to replace things so frequently.
The trick to strengthening your money management skills lies in your drive to change. People usually run into trouble when they want to save money but are unwilling to live a different lifestyle.
Jus know that it is possible to shift your lifestyle without it being a burden. When you start slow and make small changes, you allow yourself the time and opportunity to create positive new habits.
Long Term Goals
It’s always a good idea to keep your eyes on your long-term goals. Where do you want to be next year, in 5 years, and in 10 years? Make an attainable action plan with your finances that will get you there.
When you keep your goals in mind, you maintain a drive that also enables you to enjoy the journey. These strategies will help you bolster your money management skills so you can enjoy your life now without the financial stress!
Over to you…
So how well do you manage your money? What are your best tips for others who may be struggling with budgeting, managing finances, and talking about money in general?