The Ultimate Financial Management Tool

Mar9
Finanacial management at www.xtreme-assistant.com

A carpenter uses a set of house plans to build a house. If he didn’t the bathroom might get overlooked altogether.

Rocket Scientists would never begin construction on a new booster rocket without a detailed set of design specifications.

Yet most people go blindly out into the world without a clue about financial management. Their financial situation may cause anxiety, a tarnished reputation, broken relationships, guilt, or embarrassment.

Not very smart, is it?

A Financial Management Plan Is Crucial To Achieving Financial Goals

A well-made financial budget can have a great impact on your life.

Controlling money may seem hard but it’s easier than you might think. Money doesn’t know what to do by itself. Without a plan, you will drift without direction and end up marooned on a distant financial reef.

Don’t let your hard-earned dollars end up on a distant reef out in the sea!

If you have a spouse or a significant other, you should make this budget together.

Track Your Spending

Every journey begins with one step and the first step to attaining your financial goals is to identify the areas where you spend.

Expenses often spiral out of control because you don’t know how you’re spending your money. Once the budget and tracking systems are in place, it becomes easier to get things under control.

For one month, but all of your receipts in a box or folder and write on it what and who it is was for. Make your own receipt if one isn’t given. At the end of the month, categorize and total your spending. You may see some things that you can cut out or reduce spending on.

This doesn’t have to be too complicated. In my budget I have included the following categories:

  • Mortgage/Rent/Insurance
  • Transportation –fuel, insurance, car payment, and maintenance
  • Entertainment
  • Charity
  • Clothing –shoes, handbags, jewelry and cosmetics
  • Professional services –dry cleaning, mobile phone, hair, professional association fees, etc.
  • Utilities –cable and internet
  • Household –home maintenance, items to get organized, storage, décor, etc.
  • Groceries – includes toiletries since I buy at the same time
  • Medical – insurance premiums and out of pocket costs, fitness fees
  • Personal – lunch, etc.
  • Savings
  • Miscellaneous/discretionary –postal expense, gifts, pet expenses, etc.

Identify Fixed and Flexible Spending

Then you’ll want to determine what is essential (fixed) and what is non-essential (flexible) spending.  A budget should never be a financial starvation diet. That won’t work for the long haul.

Make reasonable allocations for food, clothing, shelter, utilities. If there is enough income left over, set aside reasonable amounts for flexible spending such as entertainment and the occasional luxury item.

Remember that just because the car dealer or real estate agent says that you can afford it, doesn’t mean you CAN. You have to know your limits.

One definition of maturity is learning to delay pleasure. Children do what feels good; adults devise a plan and follow it.

Saving Is Important For Financial Management

Savings should come first before non-essential spending. Even a small amount saved will help you reach your financial goals.

Have a small amount ($500 – $2,000 depending on income) put away for emergencies that you only use for emergencies. The definition of an emergency would be your car breaking down, you were hospitalized and you need to pay your medical insurance deductible, or your house burnt down.

Wanting new shoes or a new dress is NOT an emergency. Learn to differentiate between a want and a need and learn to practice self-control.

My first savings goal was to have at least my car insurance deductible amount. And when I had a fender bender with my garage door, it came in handy!

Have a small amount automatically transferred from your checking account to your savings account each payday to make it easy. You don’t have to think about it and you won’t miss the money.

Once you have your emergency fund saved, start saving for your non-essential items such as furniture, a new car, vacation, etc. Determine your priorities with these items and how much you want to save.

Save and track according to your priorities and plan. Again, this planning will help you feel more in control and you will be less likely to overspend or spend impulsively.

A Financial Management Plan Brings Clarity

Since a budget will give you a clear picture of your income and expenses, you can also then clearly see if you need to work on increasing your income. Sometimes the difficulty of meeting financial goals is not a spending problem but an income problem.

Do you need to find a better job, a second job, seek a pay raise, or start a business to add to your income? Perhaps you need to learn new skills to achieve a higher salary?

Making a workable budget is a good habit that helps you be more in control of your money, your spending, and your life.

Budgeting and record-keeping are vital to spending wisely and saving for what matters most. Give your plan every chance to succeed. Start by believing that it is achievable and that you are the one to achieve it. Begin your planning now and take control of your finances and your life!

What To Do Next:

Get the Master Your Money Mini Bundle and bonuses for less than $10.

  • Get powerful debt reduction strategies.
  • Money saving tips.
  • Money affirmations to help change your money mindset.

LEARN MORE HERE

“If you do the things you need to do when you need to do them, then someday you can do the things you want to do when you want to do them.”  ~ Zig Ziglar

 

61 thoughts on “The Ultimate Financial Management Tool”

  1. My husband and I just recently sat down and redid our budget. We are now able to put away almost a full paycheck every month and have paid off several credit cards. It really does help to stay focused on your money and budget when you can!

  2. I agree that financial security really helps with stress and even relationships. My husband and I have been much more open in communicating about our budgets, expenses, etc. as our marriage has progressed. I think it has brought us closer to budget and cut expenses together.

  3. This is a great list. My husband and I have been keeping track of our spending for years. Every receipt gets recorded. Thanks for sharing!

  4. We too have been paying off debt. Almost $11,000.00 to date using Advocare’s Debtbuster system. It feels great and my husband and I do not fight over little things anymore.

  6. Great tips! We have done Dave Ramsey and it helped but then we fell off the budgeting wagon and need to get back on. It is key to success!!!! Thanks for the reminder!

  7. As someone who runs my own business, financial planning is a must. Some months can be great with lots of money coming in and other months slow as a trickle. However I keep a budget that is the same each month and save extra on the better months to cover the slower months.

  8. Thanks for the budget tips and resources. I am always looking for ways to stretch a dollar, but I need to keep a better track record on finances.

  11. It was really interesting when my husband and I started to keep track of our expenses. When you don’t, you just don’t think about where the money is going! It can be frustrating sometimes. Debit and credit cards make it easy for us to keep track since we can’t forget about anything, it’s all right there online! We’ve found we’re able to manage our finances far better now that we know which bills we have to put away, and make it a priority to put money into saving with each paycheck, too!

  12. We love dave ramsey and went through his financial peace course which we enjoyed! I also love reading money saving moms blog!

  13. I take care of all the bills and financing in our household. My husband owns his business so we have big up and down moments. Love all your budget suggestions. Saving and bookmarking. Thanks 🙂

  14. My husband and I have loved Dave Ramsey’s Financial Peace University. Super important stuff for staying out of debt and budgeting. Budgeting is important so you tell every dollar where to go, even if it’s for entertainment or fun (you can’t starve out fun in your budget). It’s important to be realistic so it’s a budget that will last for the long term, when things don’t go as planned or expenses come up! Great post!

  15. My husband is brilliant when it comes to tracking our family budget. He knows what we should have in each account throughout the month and has a clear plan of where we should be long term. Thank god for him because I am a total nightmare. If it wasn’t for him I’m sure I’d have ended up on a chat show somewhere discussing how I had no idea where my £500,000 of credit card debt came from. 🙂
    His approach is very similar to yours and I am making big efforts now to try and understand what he does and why he does it. Considering we moved out to Kuwait to make money, it seems like the best plan 😉

  17. The automated savings plan is working well for me. I don’t miss the money a bit. Also, when I get too much money in my checking account, I move some over to savings so I don’t get too comfortable and spend it.

  18. Brilliant! Some excellent budgeting tips which I need to take note of. I plan to bookmark the links that you have referred to for future reference.

  19. These are really helpful tips for getting a budget going. It’s an important thing to do, and your article will be a wonderful time saver. Thanks for the resources!

  20. Thank you so much for this great detail. It broke down such an often overwhelming, emotional topic – money – into smaller, methodical, doable chunks. My husband owns a business so income varies. I’ve been feeling that we really need to budget at what the lowest levels might be so that when / if money is higher we can always save away lots for rainy days and leaner times, but otherwise we know at the least we’ll have enough for our needs. Thanks again!

  21. Money has always flown from my fingers. I don’t care what kind of plan I have tried to follow. Fortunately my husband is a whiz with money, so I leave the money management to him and he leaves the household management to me. SO far it works well. Though this is true i did take the time to read your article in case I ever do need to do this myself again (heaven forbid!)

  22. We are in a really bad place right now with money. I know that a good budget system will help us, however It’s hard to do it. Maybe I will try to do little changes and work from there. Thank you for the post and all the information.

    • Michal, you might want to check out some of the other resources I’ve provided. Little changes is a great idea! Best wishes, Jeana.

    • Jeryl, it sounds like you may have an income problem. You may want to consider ways to increase your income such as learning a new skill, starting a side business, or work a second job. Thanks for visiting and best wishes.

  24. Great tips here. We have used them along with FPU/Dave Ramsey for several years. It’s so important to know where your money is going.
    Anyone who is just getting starting with budgeting should follow these tips, and anyone who has been living by a budget for years can still benefit from the reminders.
    Debra
    http://www.ncborn.com/

  26. This is great! My husband and I did the Dave Ramsey program when we were first married and I am SO glad that we did. We’ve since kept a budget religiously which has afforded me to stay home with our kids and still make progress on our debt. Great tips!

  27. Some great tips here! I think just knowing what you have and how much your bills are is the best first tip – so many people just ignore it and “hope” everything is okay.

  28. Wonderful tips! My husband has taught me to be more responsible (and less emotional!) with money – sticking to the budget but still saving up for things we both want (for example, we’ve been saving for 3 years for a trip to Europe, and we’re going this May! Also in thanks to a ton of Hilton points) 🙂 Saving these tips for family and friends!

  29. This is great tips. I’ll bookmark this page, and check out some of the other links. For my personal finance management, I use Mint.com, which includes a budgeting feature that I can access on my iPhone and on the Internet. Thanks for posting this article.

  32. I have been trying to get a savings plan in place. I think it is so important to know where your money goes. Now I just need to get my husband on board! Thanks for the reminders and resources!

  35. I believe you’ve nailed it! Great, great tips. It’s so important to be on the same page with your spouse. If you’re not, it can create lots of discord. Budgeting should be discussed before the wedding!

    • Yes, Laine, I agree. Finance issues are one of the causes of divorce. Very smart to discuss during the courtship!

  36. Financial planning is so crucial to a successful life. It can be so stressful to get the plan and stick to it but I have definitely learned it is MORE stress later if you don’t.

    • You are absolutely right, Heather. But once you have a plan in place, you are in control and there is freedom and peace that comes with it.

  37. I couldn’t care less about budgeting until I had a son and became a SAHM I seriously beat myself up mentally that I didn’t budget sooner! We used to go broke with 2 incomes but now with budgeting we are doing well with 1 income how much more if I had budgeted better while I was working. Biggest regret ever but better now than never. I use the cash envelope system as well and that really works for me and my family. You have a great list and advice especially for those new at budgeting.

    • Don’t be so hard on yourself, Lerie. You are on the right path now and experiencing the rewards.Glad you saw the light!

  38. “I don’t have to think about it and I don’t miss the money.” I love that line, because it is so true when it comes to having money taken out BEFORE you receive your net. That is probably the single biggest help for most people to get started, yet also the simplest to do.

    Thanks,
    Alexander

  40. These are great tips! My husband does the budgeting in our family (with my involvement) and he has similar categories. We could work on our savings more though!

    • Debbie, great that you are budgeting. I would suggest automating your savings to ensure it happens. It builds up so fast that way. Best wishes!

  41. Great tips!! We actually went through the “Financial Peace University” class and now have all bills paid off, savings set, emergency fund and doing pretty good. Budgeting is the key! 🙂

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