Gifts are abundant and profitable. However the lack of money management, can leave one gifted and broke. Your gift is designed to provide provision. Most people have multi ideas, gifts, thoughts or abilities to earn money. In fact those gifts can be so rewarding and overwhelming that it delays or hinders one from seeing or viewing his or her earning potential. The gifts one posse are simple, regular and natural to the holder. It hardly seems adequate or sufficient enough for it to hold value, but the truth is; it does. On the other hand, our gifts and ability to make money that it becomes easy to abuse what one makes which leads us into the discussion of managing money.
Money management is the foundation to financial stability. That statement either was a powerful one to you or your reaction was ‘duh’. It may surprise some of you; that many people only think the answer to their money trouble is getting more of it. Too often people think that the method for managing their finances currently is the only method that works even when the method proves to NOT WORK effectively. Basically, people are reluctant to admit, review or ask for management tools. They simply continue thinking that somehow, someway, it will be better if they can bring in more money. There are TWO MAJOR PROBLEMS WITH THIS THOUGHT PROCESS:
Without a system of tracking revenue and expenses a person cannot properly determine IF he or she reaches the goal of bringing in more money. That’s why many work, take another job and still not find their financial status improving. Without a system, the finances fail! Money continues seeping through the cracks and poverty reigns.
Without a budget, there isn’t a cap on spending. Without a system of knowing exactly how much it cost to live on one level, the person can and will never reach the next level.
Money Management requires:
- A SYSTEM! – There is a system for you to receive your money, right? You work, your time is tracked and you exchange hours for dollars. If you are salaried, you work for a salary and your attendance is tracked. Either way there is a set system for receiving your money. At home, why wouldn’t you employ a system for tracking the money you earn and watching it leave your hands? Most people hate looking at their bills, it reminds them of what they do not have. Unfortunately it also eliminates one from seeing what they have in their possession!
Tracking money spent in your head isn’t a system. Do you know how many times you are in the red, because you’ve been tracking your money in your head?! I’ll tell you, it’s become your way of life to rob Peter to pay Paul and now you’ve convinced yourself you have nothing at all. However a real system provides accurate accounts for money in and out. It will show how the money is disbursed and how often it is disbursed.
- IT REQUIRES A BUDGET – Begin with your real needs.
- Housing & Utilities (Water, Electric & Gas) – Select a home, apartment based on what you can afford, not what will impress others. Afford is a relative term too, it doesn’t mean you can pay it in two checks or that the rent falls directly under your net income. Underwriters and credit experts say that your place of dwelling should be 30% of your income or less.
- Transportation (Gas & maintenance)
- Telephone
- Savings
A good budget will make sure expenses fall under revenues. Rather than comparing your lifestyle to the co-worker sitting next to you with the same income, look at your income alone. You can make the same money and still not afford the same lifestyle. You do not know what he or she has on the side that allows them a different lifestyle than the one you lead. Nor do you know if they struggle to lead or promote the lifestyle you view as great. Don’t compare.
- CONTENTMENT – To effectively manage your finances means to be content on your current level BEFORE you can be promoted to the next one. Content means “being in a state of satisfaction or a mindset of peaceful happiness.” To be content in a position doesn’t mean you aren’t ambitious to reach another level or improve your position, however, you cannot do that properly, accurately or effectively when you aren’t settled or accepting of your current state. People that attempt to move too fast, accomplish nothing at all! They may jump to the next level in terms of expenditures and land lower than they began when what they have spent out isn’t recovered in revenue!
- STRATEGIC PLANNING – Life happens in rhythm, your life occurs in rhythm/seasons. Not every season is profitable for you or your business. There are seasons or a time for everything! A time to plant, A time to invest, A time to cultivate the investment, A time to harvest……………..Get the Picture? Trying to adopt or move according to someone else’s season is the best way to lose an investment and forfeit a harvest!
- REVIEWING & UPDATING – After convincing and teaching my clients about business structure, budgeting, systems and the like; the next thing is getting them to accept and understand that the system must be reviewed, tried and corrected. A budget set will not monitor itself. So once the budget is set, there is a system of reporting (system, back at 1) that will tell us where you are. Are you close to the goal, missed the goal or need to re-evaluate the system in place? For example, clients or customers that do not pay on time, may need to receive penalties for late payments or change the structure of the invoices. There isn’t one sure fire way of doing things, it’s about reviewing and updating.
One of the most common myths I hear about financial security is that; “I want to make enough money where I don’t have to worry about it.” It is the most misleading statement about money. There isn’t an amount that one can reach. The worry in money doesn’t evolve based on how much one brings in; it is in the method of disbursement.
To become financial stable is a responsibility and it requires active daily action.
more to come in Part 2
