Hello All! When it comes to adulting there is nothing more important than knowing about your money. And to help us all on how to manage it better I talked to a wonderful women, Julia Kramer, who is giving us two parts of advice. Part one, the mental and part two, the actual money action.
Part One: The Mental
When it comes to money we need to take a moment to take your money on a date. You need to see what your current relationship with money and the work on building a new one. Ask yourself your history with money. Did your parents really hate doing bills? Was money a stressful topic? What is your history with money? By asking this you are finding out your current relationship. If you had a bad past with money is it any wonder that how you treat money today is bad? This is vital. You can’t grow from where you are at now if you don’t know where you are now.
Take the time to get to know your money! You will feel better about going into it, less restricted. Suddenly it’s okay to fart in front of the money now. It will be a loving experience.
Part Two: The Spending Plan
So some of you might know this as a budget, but when we go on a hot date with our money we pull out all the stops. A suit, a tie, some panty hose, the whole deal. We want to feel good and feel like we have less pressure, so it’s a spending plan. This is how we spend money, so we should own it! Here are six steps to do it!
- Add up your monthly expenses. List the bills you have to pay every month, such as your mortgage or rent, car payment, insurance premiums, utilities, phone, Netflix, etc.
- Add up your household’s monthly take-home pay. This includes after-tax pay for you and your spouse and any other income, such as investment or rental income.
- Subtract your expenses from your income. If you’re close to zero or get a negative number take a second look at your non-essential expenses, such as cable TV, entertainment and travel. These items are easier to trim if you’re spending too much or if that money is needed elsewhere.
- List your other financial priorities, such as building up an emergency fund, paying off credit card debt and saving for retirement or college. Estimate how much you would need to meet your goal and when you’d want to reach it. Then divide the time (in months) into the amount. This will give you monthly savings targets for each priority.
- Match your money with your expenses and your goals. When your income and expenses are clearly laid out, you’ll see where you can make trade-offs to come up with more cash that can improve your longer-term financial situation. Adjust your spending until you’re spending less than you make or are saving enough to meet your other financial priorities.
- Review your plan and priorities every few months. A spending plan is a “living document” that will change with your needs and situation. Life happens. And your spending plan should be flexible enough to change with whatever comes your way.
Have a great date!
Mark Oliver Wizard Goldstein