Managing Your Money

Money management is one skill that very little time is spent on during our years of formal education. Yet, it's one of the most important life skills everyone should learn.

Figure out where your money goes

The first thing to do when you take charge of your spending habits is figure out where your money is currently going. Take a look at your mortgage or rent, electricity, water, phone, and gas bills first, payday loans, and write them down on a piece of paper. Some of these bills can fluctuate from month to month, like the electricity and gas bills, so put down the most expensive payment you make on them each year. Then add in your car payment, student loans, credit card bills, yard worker, pest control, maid service, pool maintenance person, newspaper service, haircuts, kids' allowances, and other "non-essential" payments you make each month. If you get a coffee every morning on your way to work or eat lunches out every day, add those in here as well.

When you have finished, add up the numbers and put the total at the bottom of the list. Now you know what you spend every month.

Household Income

On a separate sheet of paper, write down your monthly net salary. Add your spouse's net monthly salary to this figure, then add in any child support payments you receive or other steady sources of income. Add up these numbers and put the total at the bottom of this list. You now know how much money is coming in every month. Hopefully this number is larger than the one on your outgoing list.

The Budget

Now comes the part where you compare the two lists and figure out where to economize in order to pay off loans faster and put some money aside for the future. Do you really need someone to come in and clean the house, or are the kids old enough to help out by vacuuming and dusting each week? Same thing with yard work and pool maintenance. It may be convenient to pay someone else to do it, but if you're trying to pay off some debts or save for a dream vacation, you may need to rethink your priorities.

Coupon Clipper

An easy way to save some money every time you shop is to clip coupons for the products you use most often. Keep those coupons with your grocery list, and take advantage of the savings.

It takes a little extra effort to develop and use a budget, but the results are well worth it. Keep your goals in mind, and any inconveniences you put up with while you work towards those goals will seem more bearable.