Manage Your Money Well

Balancing the Ebbs and Flows

Life is never a straight line or predictable. In order to manage your money well, your financial strategy needs some flexibility and grace. Think about the tides of the ocean. Sometimes the waves come crashing in and other times the waves gently roll in. Although the beach and rocks become shaped by the force of the water, they remain true to what they are.

Your financial journey will also have it’s own ebbs and flows. Financial advisors tend to use projections based on income increasing at a certain rate every year. Unfortunately the past two decades have proven that to be unreliable as incomes have remained stagnant for many. That can create false expectations and big disappointments. All you can count on is what you know to be true today and learn to manage it well.

Understand Your Cash-Flow

Your greatest power is in controlling the ebbs and flows of your time and money. Income is more than your paycheck. It includes any money or valuable that you receive, including gifts, rebates, refunds, reward points or tips. As you learn to manage your money well, you’ll know exactly where to stash or invest every penny you receive.

A great financial habit to develop over time is to review your payroll allocations. I wrote some tips to help you think through your automatic deductions. If you get a large tax refund each year, think about how it fits into your financial strategy. On the one hand, it is a forced savings that is disbursed once a year. Earmark it for a specific goal or purpose. On the other hand, you can reduce your payroll tax and have access to it throughout the year.

Manage Well by Using Buckets

Your daily financial decisions impact your cashflow. From the moment you get paid or receive money, you guide and direct where it goes. The choice is yours. Just like the crashing waves on the shore, you will have circumstances out of your control. Planning ahead and making room for flexibility and grace will reduce the potential for significant setbacks.

Using buckets of financial streams will help you track how much of your time and money are being invested towards each area of your life. It will also help you adjust, plan and take control of your money. Until you track it, you won’t really know or have a sense of control.

Keep your “operating account” separate. Have one account/bucket that is only for your fixed monthly bills. That will help you cover what you’re already committed to and reduce the risk of running out of money before the next paycheck. Think about having two or three separate accounts for your other buckets. Be sure to prioritize. Any time you receive a gift, rebate or refund, invest it in your next goal.

Manage your money well so you can build a life you love, reduce anxiety and have more control over your assets. Develop healthy financial habits that will grow with your income and help you accomplish your dreams. Create your bucket list and align your daily financial choices with what matters most to you.

Spend Wisely. Save Well. Find Your Financial Zen.

• Image courtesy of Daniel Byram on Pixaby