Essential Money Management Skills For Creating A Powerful Relationship With Your Money
How savvy are you when it comes to managing your money? Do you pride yourself on knowing how you use every dollar, or are you winging it and hoping for the best?
Money can be your greatest ally in creating the life of your dreams. It counts on you to be in the financial driver’s seat, skillfully steering towards your financial goals and ideal lifestyle. If you’ve never managed your money, it can feel intimidating or overwhelming to begin. You may not know what to focus on or where to start.
The first step in becoming a savvy money manager is to ask yourself, ‘Where am I now?’ By understanding your current financial situation, you are setting a strong foundation on which to build an amazing future.
Exploring your current financial circumstances is easier than you think. Read on to learn how to create a powerful relationship with your money.
It’s All About Tracking
Tracking your expenses is a very important tool for becoming aware of your spending patterns. Tracking teaches you to pay attention to your finances and helps you avoid money amnesia.
By committing to keep track of your expenses for one month, you will gain a clear picture of how much you’re spending and on what. Keep a small notebook and pen with you in which to log your daily transactions. Review your electronic debit and credit card records, and log fixed expenses like rent, utilities, car payment, etc.
By subtracting your monthly income from your expenses, you can determine if you’re spending more than you make. It can be eye-opening to realize exactly how much you are spending on non-essentials like takeout, entertainment, and splurge items. You may also discover hidden monthly costs such as forgotten subscriptions, unused memberships, or account fees.
Tracking your expenses will go a long way towards becoming a savvy money manager.
‘If you want to be financially free, you need to become a different person than you are today and let go of whatever has held you back in the past.’ Robert Kiyosaki
The Power Of A Budget
A budget is a great way to connect to your priorities and align your spending to your values. Have you ever used a budget?
Creating a budget at the beginning of each month puts you in charge of your finances. Knowing how much money you have, choosing where you’re spending it, and how much you’re putting aside will give you peace of mind while focusing on your financial goals.
Small daily actions create healthy money habits for reaching your ideal financial future. A monthly budget and tracking work hand in hand to help you build discipline while handling your day-to-day finances.
Speaking to someone about your budget can make it easier to follow through. Kylie and Anthony Sultana of Creo Wealth suggest finding an accountability buddy or budgeting with your partner on a ‘Dollar Date Night.’ It’s a fun and fantastic opportunity to learn how to work together towards shared financial goals.
‘Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.’ Pablo Picasso
Allocating a set amount of money each month to savings is a powerful way of handling planned and unplanned future expenses.
Setting money aside in an emergency fund will provide a financial cushion for covering an unexpected financial event.
Regular saving will help you accomplish long-term financial goals such as a down payment for a house, a university fund, or a dream vacation.
According to The Australian Securities and Investments Commission Report, 45% of Australians report having a short term (3-5 year) financial plan.
There are so many important things to save for! By developing the habit of saving regularly, you are setting yourself up for a successful future.
Planning For Your Ideal Future
Have you taken a moment to sit down and think about what you would like your future life to be like, especially in retirement?
Having clear, long-term financial goals makes it easier to plot a course of action on how to achieve them.
Creating an ideal future takes planning, breaking goals into smaller steps, and developing strong, sustainable money habits. You may also want to explore working with a financial advisor to implement a long-term financial strategy tailored to your aspirations.
Are You ready To Begin Building A Powerful Relationship With Your Money?
If you’re keen on learning how to overcome financial problems, set goals, and create an amazing future, check out our Money Masterclass.