Money Management Tips
Advice for Organizing Your Finances
The OMS money management tips for organizing your finances suggest that first you must
take responsibility for understanding your money.
Organized living is achieved through control, so organize your finances through knowledge and
understanding of effective personal money management skills
Your money belongs to you and you are the only person who receives and spends it. If you are not efficient at personal money management there is only
one person to blame - but don't!
Blame will render you powerless and you want to get more power over your finances, not less.
Instead change something about what you are doing. Take this money management advice and use it
to gain more knowledge, more power, and more control.
The OMS money management tips start here and the first one suggests that you should know your personal financial situation intimately if you are interested in controlling it.
You should know the amounts for:
- every bank account (to the nearest $1000)
- what you owe on personal debt (to the nearest $500). This includes credit cards, mortgage, car loans, store credit cards, basically ANY AMOUNT
that you owe contractually.
- what you need for living expenses each month (to the nearest $250).
- bank fees on each account (within $5.00).
- interest rates on each debt you have incurred.
- the amount in your investment accounts (to the nearest $1000)
- the color of "the money you have" category - See Money Management Advice
In addition you should know or be able to find out from your records within 2 minutes:
- the dates when your regular household bills are due like phone, water, monthly property taxes, utilities, insurance, loan payments, insurance.
Even if they are paid automatically through an electronic debit you should know within a few days when that money will come out of your account.
- the dates that your regular pay cheque will be deposited.
OMS money management tips to help you with organized living.
- Pay yourself every month - this means setting up regular amounts to go into your savings account.
Set up the transfer to happen the day after every pay cheque and you will never even miss it.
- Pay your bills on time to avoid late fees. This is easy if you set up automatic bill payments or do it through online banking.
- Approach your personal money management
with an attitude that will see you as the boss and not the slave to your money.
- Set up a money management worksheet
to help you understand how much you are spending and where it is going.
- Set up an emergency account - nothing can derail your organized life faster than the loss of a job or an illness that prevents you
from working and earning that regular income. Experts advise that you should have at least four months wages in the bank
- never buy anything on a "nothing down and no interest for a year" offer unless you have the
cash in the bank AND you are 100% certain it will still be there in one year.
The date that the year is up is another number that should be burned into your memory. Make sure
you pay that amount off in full before the year is up.
Three OMS money management tips for when you need a loan (or think you need a loan)
- Always have a down payment when planning a large purchase such as a car or a house.
If you think you can make the payment then you can definitely get the down payment - here's how:
Simply put the same amount away each month that would be going to make the payment. This is a good dress rehearsal for what it
will feel like to make that payment every month. After one year re-evaluate your
planned purchase and decide if you have enough money to make it now that you have some money for a
down payment in the bank and you know you can handle the payment.
This is an exercise in delayed gratification!
- Never borrow to purchase an item that will not outlast the loan period. This means no borrowing for
trips, weddings, food, gasoline. The only exception to this rule is a student loan.
An education is an investment that will always pay off in the long run.
- Borrow only from banks NOT from credit card companies, finance companies or
family members - See Family Money Management Advice
Of all the money management tips for family and personal money management to be offered here, the
the best one is:
You need to take responsibility for your own financial situation
Not knowing is not an acceptable excuse for being unable to manage your money. If you are a grown up
you are supposed to have these skills. You will never be successful at organizing your finances
if you first do not understand your own financial situation.
You must take responsibility for your own money.
It is the only way you can achieve any control over it.
by Beverly OMalley