Personal Money Management
Advice for Organizing Your Finances

This money management advice for organized living suggests that organizing your finances requires basic organizing skills like categorizing and sorting.

Sorting is not only essential for organizing your stuff but also essential for effective family and personal money management.

Even more basic to organizing your finances is understanding when you are in the black or in the red.

If your money is in control of you instead of the other way around...

You Need a Budget!

Control through understanding is a consistent theme at www.organization-makes-sense.com.

If you understand something you have a better chance of being able to control it, so this advice is offered to help you establish a consistent and accurate way of thinking about and understanding your own personal money.

Schedule It:

The first piece of OMS money management advice is to schedule a time period for organizing your finances. You have to commit to it!

Then when you are ready to get going it is time to get sorting!

Sort It:

There are lots of categories offered for sorting your money. You may have seen categories like:

Mortgage/rent
Utilities
Internet

Telephone
Car loan payments
Gas/Transportation

Credit card payments
Food....etc

In actual fact these are budgeting categories. Your budget and how much you need in each of these categories is up to you. You might want or need to spend more or less on gas or your mortgage depending on your own circumstances.

A budget is a plan for making your money work for you. Budgeting, however, is not the focus of this exercise. The focus of this exercise is to sort your money so that you can understand it better and control it.

The OMS money management advice for sorting your money offers the following 3 categories:

	money you receive
-	money you owe
-	money you spend to live
	__________________________
=	money you have

More money management advice that includes tips to help organize your finances and get more control of your money.

Organizing your finances and controlling your money is not possible unless you sort it into the first three categories so that you can realize and understand the fourth category which is how much money you have.

Money Management Advice
How to Sort Your Money

You are going to sort your money into these categories by entering dollar amounts.

These categories can reflect annual or monthly amounts, that is entirely up to you.

If you get paid monthly and have your bill payment set up on a monthly amount...

Monthly amounts can be converted to annual amounts by multiplying by twelve.
Annual amounts can easily be converted to monthly amounts simply by dividing them by twelve.

If you get paid on a biweekly basis (every two weeks) then divide annual amounts by 26 in order to determine how much from each pay cheque is necessary to cover that expense.

So much for the arithmetic, here are the categories and what should go in them when sorting your money.

Money Management Advice for Organized Living First sort your money into these three categories:
Money You Receive	Money You Owe	Money You Spend To Live
Any money that comes to you on a regular basis should go into this category. Examples are: wages interest dividends pension Do NOT include inheritance, year end bonuses, tax refunds or other "windfall" money. This money cannot be counted on to be regular income.	In this category put any amounts that are owed contractually: loans, credit card debt mortgage payments etc insurance	These are the amounts that you need to spend to live your life. Gas, food utilities car and house maintenance, clothing school tuition....etc. alcohol Basically you should put anything in here that you spend on a regular basis.
Black money amounts	Red money amounts

You start by sorting your money and doing some simple arithmetic.

Add up all the amounts in each of these three categories.

You now have three dollar amounts labelled for each category.

Here's the formula again in case you missed it the first time:

	black money amounts
-	all red money amounts
	__________________________
=	money you have

If your money is in control of you instead of the other way around...

You Need a Budget!

Q - What color is the "Money You Have" category?

A - That depends on which money category is greater.

If you have more money in the black category than in the red categories then the "Money You Have" would be black. An accountant would say you are "in the black".

If you have more money in the red categories than in the black category then the "Money You Have" would be red. An accountant would say you are "in the red".

And the most important thing of all to understand about your money is this...

If the "money you have" category is zero or less and you are "in the red" you are broke!

If you take the money management advice offered by OMS and sort your money into these categories and do some simple arithmetic you will come to a new and better understanding of your money which will give you a much better chance of controlling it. And there is no better money management advice than controlling your money.

Now That Makes Sense!

Here are all the pages on money management for organized living (including this one) offered on this website

Personal Money Management Skills - organized living is not possible without competence in personal money management.

The Absolute Basics of Money Management for an organized life.

Money Management Advice for Organized Living - Are you in the black or in the red?

If you do not know the amounts to enter into each category when sorting your money you need a money management worksheet.

Money Management Tips for Organized Living - Minimum requirements for understanding your money and tips to help you control it.

Ideas for teaching money management skills to your kids.

Family Money Management Advice - ideas to help you gain better control of family money management issues like borrowing and lending to family members.

A description of the Envelope Budget System.

Go home to Closet Organization and Organized Living

Go back to Family and Personal Money Management Skills Can Help to Organize Your Life

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