Managing Your Finances Effectively

The ability to effectively manage your finances has little to do with your ability to understand the markets, how to complicated math, understand inflation, or being able to predict future outcomes. Many financial problems people have are related to behavior and the ability to control that behavior. If you can do basic math; add, subtract, multiply, divide, you can follow along and manage your own finances.

Signs your finances are out of control and heading for disaster:
o Spending more than you make
o Fights or disagreements over money
o Falling behind on bills
o Living paycheck-to-paycheck
o No emergency fund
o No savings of any kind to speak of
o Little to no retirement fund
o Bouncing checks
o Frequent overdrafts
o Using credit cards to cover expenses
o Constant stress and anxiety
o Late, over the limit, or other fees appearing regularly on your statements

There are more, these are just a few that often jump out at people immediately. I know these well because at one point this happened to me.

Facts: If you do not take control of your own money no one else will and you will have nothing when you retire.

You have to take care of yourself.



In order to take control of your money, you have to take a hard look at yourself and admit you have a problem. People want to blame everyone else for their financial problems; the boss doesn't pay me enough, I had some emergencies to take care of, had a wedding or child we needed to pay for, and so on. While circumstances can impact your life causing unexpected financial issues, what it really comes dow to is, you are the problem. How you handle your money and unexpected events are what drives you towards financial success or failure.



Once you made a commitment to yourself to take control of your finances, the rest of the steps are common sense and very easy to follow.

Dave Ramsey describes people who live financially out of control like this: "Living in the Land of Stupid." An in your face statement, but true. I use to live in the 'land of stupid' myself for many years. As I said in the Introduction it took me almost 12 years to understand how money and debt worked. I didn't understand it until I began to take control of my own money. I'm hoping people who read this will wake up and take control of their money much faster than I did and not avoid it because of any discomfort or uneasiness surrounding the topic of money.

What to do now is next...