I’ve been talking and posting about money all year and this will only pick up as the year ends and a new year is upon us. You can have all the money in the world and without money management, never reach your goals or improve your lifestyle. We learn the value of money as children and that value is based on our observation through the adults around us. Money is that one thing that isn’t always discussed unless it is to talk about the lack of it. People without ‘money’ so to speak definitely avoid discussing it because they tend to feel that what they do have is insignificant to discuss. Been there, acted like that!
The truth is, money, in any ratio or quantity must be handled strategically if one is to be successful or increase the amount of money earned later! Let’s start with these basic 4 questions.
How? – How one spends his or her money is spent says it all. Is there a budget set before the paycheck comes in? Has there been or is there a plan or list of bills to be paid before money is in place or is the money spent when received? The person who plans or is brave enough to look at the budget before the money hits the bank or your pre-paid debit card will be far more successful than the one who pays out funds as they receive the funds. Planning for disbursement is much better, more responsible and results in the least likelihood of something being missed or overlooked.
The plan begins with a monthly budget of all current bills and current revenue. Most people are salaried and receive the same amount each week, bi-weekly, semi-monthly or monthly. Setup a spreadsheet with all those you pay monthly and match it against your pay cycle. Systematically, make sure each you schedule payments. NEVER schedule or distribute ALL of your income. You’ve heard that you should pay yourself first, that means placing something in a savings account so that you always have something left or untouched! Most people, yea I used to do it, pay his or herself by shopping. While that is fun, enjoyable and necessary (in its place), it works against this purpose.
The goal with the budget is to make sure we are living below our means. To stop the cycle of everything coming in and leaving out, to break the check-to-check system of existing, because that is not living.
Don’t spend or disburse your funds like they are a surprise. Plan ahead. Disburse wisely and strategically. Doing so reduces impulsive spending which means better choices and fewer overspending problems.
When? – ‘When’, works well with how. Timing is everything! Spending money at the wrong time causes cash flow issues that are too often hard to correct. It’s simple the minute you spend money now on things you want immediately; thinking and assuming you can replace it (that money spent). That’s when something will go wrong with your check and or something else unforeseen occurs that also pulls money from you. It won’t be something regular but an emergency like your vehicle breaking down etc… It’s the law of nature. The minute you make a move that requires everything to go right for the move to be made successfully; then just know that everything will NOT go right.
Money is easy to mismanage but harder to fix. That was literally my life, my mindset for years. Deals, shopping, must-haves all seem to take priority and I found myself in a ditch of lack and limitation. However, when, I began to let go of the impulse purchases or the need to do things I knew wasn’t in my budget, managing my funds grew easier and so did my money. It’s not a deal if I have to sacrifice a need to gain a want. Waiting is the better deal. The “When” is all about maturity in purchasing, one must grow up and overcome the timing issue.
WHY? If you have ever purchased something based on the reaction of another then please do not pretend you don’t understand the ‘why’. The disciple to say ‘no’ or ‘I’ll pass’ is easier when it is a decision made alone and just for one’s self; however, add a crowd or people that one wants to impress and good sense leaves the building.
Be sure that your spending is fueled by you and NOT an attempt to pretend, please or catch another’s attention for any reason! Whether it’s to impress someone of the opposite sex, attract a more elite group of co-workers or to impress potential investors; spending money on things you do not want or wouldn’t ordinarily purchase is a waste of money! Anything you do not value you will treat it like that and waste valuable dollars. When you know, ‘why’ you purchased, spent money it is easy to review and improve future transactions. When you do not know ‘why’ you spend it is impossible to correct it. That’s a sad state to live.
Know your ‘why’. What if you are repeating something you learned through observation? Taking time to learn why is the first step to making a conscience decision about continuing or ceasing activity. Generational curses are broken because they aren’t identified. Identify your why so you can decide if money behavior is to continue, cease or change.
WHAT? This may sound real crazy, however, most people do not know what they spend and/or how much is spent on any item. I witness this in tax season when generated reports and bank reconciliations display the amount spent at restaurants or for other entertainment purposes.
The things one purchase will tell you what he or she the values. If he or she has material goods but lack the basic necessities, like food, proper shelter, insurance; you know that their appearance to others is more important than making sure that needs are met first. Those people tend to buy what they want and beg for their needs. It’s a dangerous and troublesome cycle.
Poverty is a mindset. Money decisions should never be made habitual. Money decisions always require thought. 90% of people have a fixed income, although it is a term older people use quite often, it is true for most people. Salaries are fixed and in the past ten years, raises have not remained proportionate with inflation. Falling into money traps are easy. At the same time breaking those money curses isn’t hard, but requires work, attention to detail and a willingness to change the method one has for tracking dollars and spending dollars.
Elevate your mind and watch your money follow!
