6 Step Guide To Money Management
Money management is all about keeping debt under control. Proper money management includes budgeting and using debt responsibly. Every
person should have a money management system in place for their personal finances to ensure they do not end up with too much debt or credit
There are some simple steps a person can take to establish their money management system. The following outlines how to set one up and manage
1. Make a list of all income, expenses and debt.You should include assets and investment income here as well. You must lists every expense and
debt so you have a clear picture of your financial situation. Make sure to get all the proper amounts, too.
2. Make budgets for each pay period and monthly. You should list your income on one side and your expenses on the other. By making budgets for
each pay period and monthly you can more easily see where you may fall short during the month and where possible problems could occur.
3. Look for problems or possible problems. If you have outstanding debt then this is a problem that needs addressed. If you notice you are continually
falling short on a payment then this should be addressed too. You are basically looking for anything that could cause you to fall behind or get more
4. Ensure that income and expenses are balanced. Your expenses should never exceed your income. This is the most basic of all financial rules. If
you see that your expenses are exceeding your income then you will need to address this as a major problem.
5. Find solutions to any problems.Now that you have clearly defined any issues you need to find solutions for
them. This could involve cutting expenses. You could get a consolidation loan or negotiate with lenders to get better rates. Whatever it takes to get
your budgets balanced. In the end you should be able to comfortably pay
all your expenses and still have some extra money to allow you to save and handle personal needs.
6. Follow the budgets to maintain good money