- Family and Personal Money Management -
Organize Finances and Organize Your Life
Family and personal money management skills can help you organize your life and your finances.
The real basics of money management for a more organized life, require that you understand your finances and put systems in place to achieve some control.
You cannot organize your life without money management skills. It is impossible to achieve control
over your life if you do not have control over your financial circumstances. That includes understanding
how much there is, where it comes from and where it goes.
Managing your money is the same as managing your stuff. You have to first understand it and then find places to put it so that it is there when you need to use it.
and bins can hold your stuff but your money goes into virtual containers called accounts. Usually your accounts are in a bank. A bank account is just really a safe storage places for your money. They are certainly much safer than mattresses, shoe boxes, and jars.
Money works for you. You should not be working for the money. As the boss you are the only one who can achieve control of your financial circumstances.
This idea is one of the basics of personal money management that needs to be understood in order to gain control of your life.
Unlike clutter you want your money to accumulate! It has to accumulate or it will not be there when you need it to do its job for you.
What is meant by the term "Personal Money Management" here at OMS?
Managing money and building wealth are sometimes considered to be the same thing but they are not.
Building wealth has as its goal accumulating money and then converting it into assets or using it to create even more wealth.
Personal money management has a different goal and that goal is control.
You achieve control over your finances by understanding how much you make, how much you have, and how much you spend. You build wealth by how you use your financial assets which may or may not include cash.
But it does not matter how much energy you invest in wealth building, you will never be wealthy unless you first understand your own personal financial situation.
Personal Money Management Using Jars and Envelopes
It wasn't that long ago that wages were issued as a "pay packet" which essentially was an envelope stuffed with cash. The money was brought
home on payday and stuffed (again) into envelopes or jars each labelled as to its final destination or intended use.
How much money was put in each jar? That was easy to figure out because people understood how much was needed for that specific jar until the next pay packet was issued.
Over the course of the month all the coins and paper notes in the MORTGAGE jar went to make the mortgage payment, everything in the GAS BILL jar went to
gas company to pay for heat, and the cash in the GROCERIES jar went to buy food.
It was a simple system, but a system nonetheless.
A money jar or envelope system for personal money management keeps the cash highly visible. It is easy to see the relationships between your cash and the services or goods it is intended to purchase.
It is also easy to see when the cash in the jar is running out and of course it is obvious when the jar fills up again on the next pay day. In other words, putting your cash in glass jars makes personal money management easy to understand. It is a highly visible way and practical way to organize your finances, it is just not very safe.
Today it is quite likely that you seldom, if ever, see or handle your coins and paper notes.
Cheques and electronic fund transfers have taken the place of the "pay packet". Bank accounts have taken the place of jars, and debit and credit cards have taken the place of cash.
Because money is not highly visible and is now more of an abstract concept, for some people it becomes more difficult to understand and control it. For some this makes it more challenging to get organized and achieve financial control.
This area of the website will provide information, tips and tools for understanding personal finances just as though you had those jars and filled them up every payday!
The goal is to explore ideas about family and personal money management that form the foundation for a more organized life.
Now That Makes Sense!
by Beverly OMalley
More on how to organize your finances.