- Personal Finance
Four Steps To Greater Prosperity-Your Financial Plan
How to manage your money
Everyone wants more bang for their buck, right? Well, did you know that if you are navigating the waters of finance without a plan, you are a captain of a ship lost at sea? Yes, you are the captain of your finances. You choose to put your money down on whatever square you want in this game of life. How do you choose to spend your money? Are you in control of it or is it in control of you?
It’s the New Year, a time to re-evaluate your finances for your greater prosperity. By setting up a financial plan you will have twelve months to test it, tweak it, and take control of your money.
The following steps will assist you in evaluating what position you are currently in, financially, to allow you to lay out the best course of action.
1. Know your relationship and feelings toward owning and operating your money.
2. Organize your life to invest in a set time and place to review your finances weekly.
3. Gather all of your financial facts to allow for clear, well informed financial decisions.
4. Learn how to manage your money through educational material or professionals.
Don't miss your golden opportunity
Suze Orman's suggestions for financial freedom
In the book, Women and Money , financial guru Suze Orman suggests that we must first explore and understand our relationship with money. Whether we want to believe it or not, we all have a relationship with money, be it good, bad or indifferent. Like any relationship, the more we know and understand our partner, the happier the outcome.
There are two general observations about people and money: first, the greater percentages of people in the world do not understand finances, and second, they experience mixed feelings about owning money. Those two pieces of the relationship equation can be placed in the category of ‘blocking’.
Clandestine and unconscious negativity, such as these two factors, will stop the flow of money into your life. It is right action to take inventory of what you do to sabotage your greater good, when it comes to your financial well being, no matter how emotionally painful it may be. Without shedding light into the dark crevices of why you deny yourself financial freedom, or why you continue to repeat patterns that destroy your financial health, you will continue to operate from a place of mystery…and only you hold the key to solve it.
Money is energy. Yes, it has tangible qualities; however, those qualities are only manifestations of how you have chosen to allocate your money energy. It is not the ‘things’ that we can buy with our money that is the issue, because that is always changing. It is our ideas of what money can do for us: buy happiness, health, or freedom. That is what makes it become important.
Financial security through organization
Organization is one of the main keys to managing your finances effectively. Take a quick look around your home. Your ability to focus will be a direct result in your ability to put your fingers on your checkbook, your financial statements, etc, quickly. Do you have an office? What shape is it in? Is it cluttered or clean? Is your desk area or chair filled with objects you have to remove to sit down? What time of the day are you preparing to reconcile your finances, check for upcoming events, evaluate if any emergencies have gouged your savings? Is this a time when you are trying to prepare for dinner, or the kids are expected home from school? Or is it late at night after a full day of work? How you feel will affect your level of concentration.
Do you have good money management?
Do you feel you have good money management?
You and your money
As you prepare for the tax season you will need to gather several things, no matter if you do your own taxes or have someone else do them for you. Being aware of your finances in order to chart the direction of the New Year, you will need things as well. Primarily, the information will be found in bank statements, current and outstanding bills, paycheck stubs, and receipts of purchases. You should also know your retirement plan, your insurance policies, etc.
If you have not kept any receipts and do not have a clue to your spending pattern, i.e. where the money leaks are, then it is advisable to track it for one month by writing down every purchase you make big and small. If it is a ‘typical’ month it should give you a basic idea of what you use. Now, add in the times, to your recollection that you bought gifts, or look at credit card statements. Additionally, include your expenditures for gas, food and travel. By reviewing basic categories of ‘life’ you should be able to reconstruct your spending.
By comparing your income, (paychecks, child support or alimony checks, monthly dividends, bonuses, etc) and your output, (all of your bills, child support, alimony payments, etc) you will be able to see in black and white the financial position you are in at the beginning of the year. If there is a deficit, now is the time to repair the leaks before the year rolls on. This way you are able to reassess and adjust as needed. Remember: your financial well being is the goal.
Fiscal Wellness: Knowledge is Empowering
Knowing what our state of financial health is at all times is no different, and no less important, than knowing what our physical or mental health is at all times. Without fiscal wellness we are holding ourselves back and maneuvering through the world handicapped. Knowledge is empowering. There is a plethora of information available today via books; DVD’s; classes, both online and through community education; and meeting with a financial advisor, which will enhance your ability to understand the world of finance.
The more we know the more we grow, so check in with yourself and ask if you are feeling intimidated or confused about handling your own money competently, and then seek the clarity that will assist in moving through those feelings.
Remember, with every problem there exists more than one solution. It is your responsibility, as captain of your financial ship, to open your mind and inventory what you know and don’t know; then be proactive in your learning process.
Empowering yourself with knowledge will result in confidence and clarity.