Top Three Tips To Manage Your Own Money.
Do you ever watch other people managing their money, achieving financial goals, and wonder how they do it? How can they navigate the waters of financial management without getting lost or overwhelmed?
There are some simple strategies to put yourself in the driver’s seat of your own financial life. The most important thing to remember is to take everything you do one piece and one step at a time. Don’t let yourself get overwhelmed – you can do this!
1. Schedule weekly money dates.
Millionaires spend, on average, 8.4 hours a month managing and planning out their finances, according research by business theorist, Thomas Stanley. While many people want to be millionaires, most also don’t devote the time and energy necessary to make it happen. So don’t make that mistake.
Instead, set up a recurring event in your calendar for a weekly money date, and allocate at least one hour a week to your finances. During your money date, you should update your budget, review any upcoming expenses, pay bills (although you should automate those as much as possible), review your accounts for accuracy and handle any other pressing financial matters.
2. Commit 20 minutes a week to reading about personal finance.
Don’t try to learn everything about personal finance all at once. Instead, break up your financial education into digestible chunks. Allocate 20 minutes a week (as part of or in addition to your money date) and read about personal finance topics. Choose one topic a week and read about just that topic until you understand it, then move on to something else.
3. Talk to people you look up.
As you begin to learn about personal finance topics such as spending, saving, credit, debt, investing and retirement strategies, apply what you learn by talking about it with those you admire. I often find that there is a lot of financial chatter out there, but most of what your friends and family know about money is wrong.
Instead, talk to mentors and other entrepreneurs who are successful in their financial lives. Ask them about their successes and failures. Just like in business, I’ve found I can avoid a lot of financial mishaps by learning from the mistakes of others.
– via Entrepreneur
Learn the Fundamentals
One of the most important steps you can take toward owning and running your own financial life is understanding the basics of managing money. By learning the fundamentals, you give yourself the strongest and surest foundation possible to manage your own money.
There is a ton of technical financial information out there, and it takes time to learn what you need to know. The Internet, though, has made this process easier.
You need to focus your attention on these areas:
- General principles of financial planning
- Estate planning
If you look at those areas and feel overwhelmed, I understand. It’s a lot.
On the other hand, if you look at that list and feel that you know it all, I’d suggest rethinking that. No one out there knows it all. There is always something else to learn.
Again, the Internet makes finding this information easier, but there’s a catch. You need to carefully validate the sources of the information you collect before accepting it as true and accurate. Many financial blogs and podcasts can be extremely valuable, but others are based more on personal experience than on years of education, training, and professional work. Personal stories can help you tune in to your own situation, but they might not reflect a comprehensive understanding of finance or relevant laws and regulations.
Manage Your Behavior
This is by far the most challenging piece, because emotions often cloud our thinking. It can feel simple to manage our own money when times are good. However, we often fall prey to recency bias—assuming that what happened in the recent past will continue into the future. Confidence (or fear) projected into the future can distract us from making prudent decisions.
When things get stressful, you get distracted. Other things take up your time, energy, and attention, diverting you from managing your finances.
As you continue to learn, you might also find yourself confused by a myriad of opinions and different ways of doing things. Decision fatigue can set in. It can become extremely challenging to make even the simplest of decisions as you start questioning yourself and your knowledge.
After all, there’s a lot on the line—your money and your life. You don’t want to make a mistake, and you want to do everything you can to maximize your financial resources. Your decision-making can become clouded by fear, and it can just as easily be affected by greed.
To successfully manage your own money, you need to manage your own behavior. That means taking small, consistent actions over time. You need to create your plan of action and stick with it through market ups and downs, through everything from personal struggles to professional triumphs.
– via MONEY.com
Have you hired a financial planner or do you manage your own money?