The fact is money management is no cakewalk. The truth is it’s backward; money management is like “walking a cake”, which is completely impossible (because cakes have no legs, not to mention you really can’t put a collar around them). Don’t be scared, though. While the ever-defined and surprisingly intimidating checkbook can keep you in “check”, check out these tips to helping you be a Master Money Manager:
Organize every financial statement you can possibly find!
Including bank statements, investment accounts, recent utility bills, and any other sources of income or expenses–it’s essential to getting a better understanding of what you’re up against and how to handle it.
Write all of your income sources DOWN.
It’s pretty obvious that you need to know just how much money you make.
Establish a monthly expense list.
After knowing how much money you make, make sure your money is enough!
Fixed and Variable: Know these two terms.
What they are is simple: they are the two categories for your expenses. Fixed expenses are such things as your cable bill, insurance payments, things that never change. Whereas an example of a variable expense is having a date night every week (which could change, but hopefully not!).
Compare your “damages” with your “duct tape”.
I call it “duct tape”, because that stuff can fix anything. Just think of your income as a ‘fixer’. And your bills are what needs ‘fixing’. If you have more than enough “duct tape” to cover your “damages”, then you’re off to a good start.
Cut corners! If necessary!
If you have the opposite, though (more “damages” than “duct tape”), be sure to adjust your expenses!
And, finally, Tip 7:
Every month, etch it in stone– You Must Review Your Budget. The words are in capital letters because it’s extremely important.
This final tip including all the previous tips will get you onto the precipice of becoming a Master Money Manager.