Let’s face it: money management feels like a chore.
If you don’t know what to do, you’ll never feel organized or in control of your finances.
Most people believe that being well-organized with money means budgeting. Budgeting is one aspect of managing your finances, but there are other steps you can take to make your money run like a well-oiled machine. And with technology these days, organizing your finances is easier than ever.
I put together 10 tips to help you become more well-rounded and organized financially.
Money Management Tip 1: Calculate Your Earnings of Your Entire Working Life
I learned about this step from the classic personal finance self-help book Your Money or Your Life (audible) by Vicki Robin, Joseph R. Dominguez, and Monique Tilford. A lot of financial bloggers highly recommend this book. They are right; this book is amaaaazzzzing!
All you have to do is add up all of your living wages in your entire lifetime. This means even adding wages from when you worked for your parents at thirteen, and they paid you in cash. Account for everything. You can use their website’s Life Energy Calculator, although I highly recommend calculating everything manually as well.
Calculating your lifetime earnings gives you a broader perspective of your future earning potential. You get to look at your financial life from a bird’s-eye view and compare your total lifetime earnings to the amount you’ve saved. This number will give you perspective on how well you’ve managed your productivity, efficiency, and energy.
Money Management Tip 2: Export Your Spending to an Excel Spreadsheet
Making spreadsheets of how and where you spend your money will help you better manage it. You don’t have to make spreadsheets every month, but just once initially to observe your spending habits. It might be a little nerdy, but it’s so fun to do!
Go to your online bank and export your daily spending into an Excel sheet. (If your bank doesn’t have an option for this, then by golly, change banks!) Go through one month of spending and categorize it in Excel or by hand with a good old-fashioned calculator and highlighter.
Categorize each transaction – bill payments, dining out, groceries, gas, clothing shopping, misc, etc. Analyze where you can better tweak your spending habits.
Then, move on to using a tool like Mint or Personal Capital to maintain afterward.
Money Management Tip 3: Get One Month Ahead
Becoming a pro at managing money is simple math: spend less than you earn. And don’t let your bank account get in the red zone.
So then, why are so many of us living paycheck-to-paycheck? It’s such a painful situation to be in, and yet we do it to ourselves. If you are living paycheck-to-paycheck, make this task your number one priority.
Breaking the paycheck-to-paycheck cycle and getting one month was a total game-changer. It gives you peace of mind and financial security and creates a stable financial foundation.
Money Management Tip 4: Create a Net Worth statement
If you are not good at Excel. You don’t have to be. I’ve got you covered! Check out this blog post, or sign up for my mailing list and get it for free! Check out this post: How to Calculate Your Personal Net Worth.
When you fill this out, you know where you stand and can start setting your financial goals. It has given me much more clarity on what needs to happen in the future.
Money Management Tip 5: Cut Back on Spending
Why can’t we all be ravenous souls and spend without consequences?
Cutting back on expenses is one of the best ways to improve your financial situation. And especially if you are in debt, there’s no way around this. You have to.
I know. Cutting back on spending is painful. The truth is no one likes to downgrade their lifestyle, but it is a must if you want a better financial future. Trust me; you’ll be thanking yourself in the future.
Money Management Tip 6: Make More Money
Another great way to improve your financial situation is to make more money.
Americans are known to be overworked and stressed. According to Fortune, America is ranked #16 out of 195 countries worldwide to be among the hardest-working countries. So, take on a side gig or increase your work hours if it fits your belief system.
When I held multiple jobs, I realized how much time I was wasting. I once believed that a 40-hour workweek was the maximum workload I could handle, and then I worked 70 hours a week. This gave me greater confidence in my ability, stamina, and work ethic.
Money Management Tip 7: Take Responsibility For Your Own Financial Life
Taking responsibility is half the battle. Not just for your financial life but practically anything in life.
Coming to terms with where you are financially is the first step to making a change. From there, you can reflect on past spending habits, make a plan, and set goals for your financial future.
Take action. Remember to forgive any past regrets and give yourself compassion along the way to a brighter financial future.
Money Management Tip 8: Look at Your Bank Account Every Morning
Looking at your bank account feels like jumping on the scale when you know you are overweight. It sucks, and you avoid, avoid, avoid. But you must do it.
Muster up all your might and start working your courageous muscles. Face it dead-on every morning. It will be hard at first, but eventually, you’ll be smiling at the improvements in your bank account.
Money Management Tip 9: Write Down Your Financial Goals Every Morning
I used to write down my goals now and again and forget about them. But everything changed when I learned about writing your goals down daily from Brian Tracy’s book Eat That Frog (audible). Writing down your goals every morning keeps your goals at the forefront of your mind. I highly recommend stacking this habit with the habit of checking your bank account every morning.
Money Management Tip 10: Open a Retirement IRA
You have probably heard of this line from other financial self-help gurus: pay yourself first! Take a portion of your earnings and have it earn money.
Here’s the concept: If you make $800 a week. Put whatever amount aside first. Say you put away $100, then naturally, you only have $700 to spend. You’ll soon forget you ever had that $100.
I promise that life will get easier once you adapt to this mental shift.
Take Away
Now that you have the 10 tips to get you insanely organized, you are well on your way to managing your money like the boss that you are. The great thing is you don’t have to do it all at once. Pick one money management tip that speaks to you and take action. Remind yourself why you are doing this, and get it done. Good luck, and have fun!
