Smart Money Management
Smart money management skills are part of the learn-about-money-so-you-can-protect-your-own-ass(ets) action plan. Learning the mechanics of money management is important. Why? Because you need to increase your money awareness, get clear on your personal finances, and stop the game of financial dishonesty that so many people play.
Smart money management skills provide us with clarity. You know your monthly income and outgo. You know the amount of money you have in the forms of cash expected, account receivables (money others owe you), savings and investments. You know what you owe in terms of bills, debts and long-term obligations.
An accurate cash flow analysis tells you when to expect cash to flow in and out of your business. A spending plan helps you see and be clear about your spending intentions, thereby affording you more control over your money. When you have a spending plan you’re less likely to do impulse buying. These are the analytical components of managing your money. Find and use the right tools, and perform ongoing analysis to stay on top of your unique money situation. Make it a routine. By doing so you gain the discipline and confidence that comes from knowing exactly where you stand.
Tools to Use
Set up systems that work for you. Some tools to consider are Mint.com for maintaining bank accounts. Use Quicken or Quickbooks for your personal and/or business accounting. Consistently use and maintain the tools you decide are best for your needs. It’s about paying your bills before the due date; regularly balancing your bank accounts; auditing your bills monthly; automatically adding to your personal savings, and paying down or paying off your credit cards.
Money management is taking the reins of your financial life by pulling up your big-girl/guy pants and taking command. It’s about establishing your own no-BS financial reality. It’s knowing that the truth is way better than living in the cobweb of illusion and lies created by not knowing your own bottom line.
Word
Money is a language you must learn to speak well. Get fluent. Read personal finance blogs. Contribute to the collective dialog. We have been silent about money too long. Look at how that has allowed our country to be defrauded of billions of dollars because we didn’t ask questions; thought money was too difficult to understand; or believed that the money makers “cared” about you and would do the right thing. Wrong.
It’s time to clear out money fog. Let’s breathe in fresh air and rid our heads of cobwebs. Get into the flow of money. Raise your awareness by reading more money articles, personal finance books, this and other money-related blogs.
Homework!
Experience online banking. Open an online savings account. I like ING Direct, but there are others that might appeal to you more. Share with us your online banking experiences.
Read Suze Orman’s 2009 Action Plan.
This book is about Keeping Your Money Safe & Sound.
As always, your comments are welcome. Become part of this community by sharing your opinions here. Click on comments and tell me what you think. I use the Comment Luv plugin which means your URL is visible after you comment. My readers can then read and comment on your site too.
Happy March 2009!
Judith
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March 2nd, 2009 at 9:01 PM
I am glad to read you suggest ING. I've been going back and forth about whether or not to open an account with them, whether or not they are solid…so I appreciate reading that you can endorse them.
March 3rd, 2009 at 3:44 PM
@ Rene – ING is pretty great but there rates have dropped dramatically recently (6 month CD is only at 1.25% now). They don't synch up with mint or thrive either, which means you can't track them online if you use one any online money management tool, but they are a very solid company.
@Judith – Really great article with fantastic recommendations. We would love to see you review our company Thrive (www.justthrive.com), to see if you feel (as we do) that it would be a helpful, free financial resource for your readers.
Happy Saving,
Elisa@Thrive
March 4th, 2009 at 12:56 AM
Elisa, thank you for your input. I don't use a money mangement tool (yet), so that wouldn't be an issue at this time. I will also look at your link.
March 7th, 2009 at 8:21 PM
Thank you again Judith for your "wake-up" call last week. I have been working on paying attention to my own thoughts and correcting course when things start to go the wrong direction.
Your post was very timely IMHO as it served to remind me that money is more than just a medium of exchange. It is a tool that we all need to understand fully and learn to use it in the mose effective way possible.
March 16th, 2009 at 4:45 AM
Hi Elisa,
Thank you for the information you shared. You're right about ING having decreased its interest rate. While I don't think it's important if saving accounts synch with free online resources, I appreciate you clarifying the issue.
I'll click on Thrive as soon as possible. I'm all for thriving, which is much more satisfying that merely surviving.
Judith
March 16th, 2009 at 4:49 AM
Hey Rene!
It's good to see you here. I know we discussed this offline, I'm pleased that Elisa responded to your comment here. As I mentioned, I will publish a list of online saving accounts' interest rates this week. I've been swamped. I really appreciate your patience on this.
Take good care,
Judith
March 16th, 2009 at 4:51 AM
Hi Terresa,
Nice comment. You're so right. I think we talked about this on Skype last week, so please read my latest post on Money and the Law of Attraction. You'll love this book. As you read, please share your thoughts with us.
March 18th, 2009 at 2:40 PM
I brought up ING integration because our users get used to tracking everything in one interface, and so it's a constant issue for us in trying to meet the needs of our users who are ING users (including our own staff!). So, I think it could be really helpful for some people if ING integrated, but I completely agree that it doesn't make ING a lesser place to stash your cash.
And even with ING's new low interest rates, they still have historically high interest rates, and a great company record.
In fact, interest rates are pretty low everywhere. We wrote a little morality tale about how to "Turn Money Into More Money" when interest rates are low across the board.
http://blog.justthrive.com/2009/03/iznop-fund-mak...
Hope you enjoy!
June 3rd, 2009 at 2:35 AM
Nice post, money management and proper budgeting is most definitely a must. There's just no way around it IF you want to stay on top of your finances. Also I noticed you mentioned ING Direct; I have heard a lot about them and look into online banking options. Thanks for sharing.