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Top Tips for Money Management
1. The Fab Four
There are four pieces of financial information that you must know as intimately as you know your bra size.
- Your exact monthly income
- Your exact monthly expenditure
- The exact amount of your debt
- Exactly how much money you have left over at the end of the month (or not)
These four numbers impact your future financial decision making more than any other piece of information or education you could ever have. If you do nothing else, find out these numbers. Once you know them they will guide you in the right direction.
2. Talk, Talk, Talk.
It's supposed to be what we do best so lets put it to the best use. Let's get this stuff out in the open.
One client explained to me that any subject was acceptable at her parents table while growing up, from sex, to politics to religion to you name it. Except money. Money was not considered polite conversation and certainly not in front of others. You will be astonished to find out how many people who appear financially stable are experiencing financial problems. From where to find the cheapest toilet paper to how to get out of debt, your answers could well be in your own circle of family and friends.
3. Read, Listen and Learn
Whatever your buzz; books, tapes, CDs courses or seminars, begin your own financial education.
Read the financial section of the paper. It might start out being dull and maybe even double Dutch to you. But you'll become familiar with the language and it will provoke questions you will want answers to for your own financial life. There are many many sources of information available. Make a decision to learn about you and money.
4. Christmas is coming and the credit card companies are getting fat.
As a nation we run up an astonishing percentage of our annual debt in the holiday period. This holiday season do your family and friends a favour. Be the one that suggests that you are all reasonable with your gift expectations. Calculate how much you can spend without using credit and stick to it. Trust me, a Christmas bought and paid for in cash is a much different one than one provided by increasing debt. Try it and then tell me how it was for you.
5. Take one big giant step backwards
Go on! Stand up and step back now. Did I mention that Christmas is coming up? Let me mention it again. Christmas is coming. Prepare to be bombarded with "Pressure to Purchase". Everyone and everything from the neighbour with the Santa circus in the garden, to the media and advertising, to little Johnny begging for the latest gadget, to that cute bearded old man in red at the shopping center is going to tell you what you need to buy.
Every time you see one of them coming, every time you reach for your purse I want you to take a big giant step backwards away from them and ask yourself if it is you or them that is making the decision.
