Gaining Control of Your Finances

Managing money is all about prioritising. This is the case for any lifestyle, and no matter how much or how little your income. Apparently, it all boils down to 'The Micawber Principle'. Those familiar with Mr Micawber, the character from the Charles Dickens novel: 'David Copperfield,' will be aware of his observation from which this principle derives:

No one can argue with that - rich or poor. You must live within the level of income you receive, and manage your money wisely if you wish to stay out of debt. Moreover, it also demonstrates financial skill when you're able to successfully avoid the proverbial sleepless nights that being in debt inevitably causes.

Many folks seem to possess a natural affinity for managing money responsibly while others, often by their own admission, are hopeless. It's sensible that more emphasis is placed on financial planning and management in school curriculums nowadays - with a degree of input from parents. This way, earlier on in life, there's a good foundation established for properly managing future earning potential.

Don't be one of those people who never prioritise. As soon as any amount of money becomes available to them, they'll fail to use it wisely and before they know it - it's gone and they've nothing to show for it.

Priority expenditure means settling those bills that need to be paid each month without fail so you can meet the obligations you've signed up for.

Mortgage and home rental payments must come first above all else. If you have no roof over your head, then what use is anything else? Added to these outgoings are utility bills and other regular payments that need to be paid to enable the smooth running of your household. These have to be settled on time and on a regular date convenient to you. You'll also need a pot of gold at the end of the rainbow to cope with unexpected repairs if you're a householder.

You'll need to set up direct debits to go out from the main personal account into which your pay check goes in, on the day after it arrives as this is always the most efficient way to manage your income and expenditure. Only then, when all your monthly monetary obligations have been met, can you take a look at what's left and decide what to spend it on.

Even then, you must be discerning and not be overly liberal in your attitude to money. You've earned it. Don't waste or fritter money away, when you could put it to far better use by investing in your own future and achieve the financial security that eluded you previously.

People often go wrong by not effectively taking charge of their income because they choose to spend it on unnecessary items or even luxuries first. This leaves them with nothing for the essentials. How often do you read of doting parents who overspend on Christmas presents and then have little left to put food on the table by New Year? As well as prioritising, you must think ahead and not take the chance that "something will turn up". Even religious folk fall foul of that expectation: "God will provide." - He won't!

It might not be easy for you to manage your money wisely if you haven't done so before, but you can soon get used to more disciplined habits by keeping a written record of all income and expenditure.

You don't have to be like Scrooge, another of Dickens's well-known characters, but if you're careful with your money you'll soon find you can meet your obligations and perhaps even save a little for a long-deserved vacation.