Here is a list of tips to inspire you to manage your money well. I don’t normally write about budgeting, but I created these tips for a software program and wanted to share them here.
Some of you may know that, in addition to blogging, I am also a computer programmer. These tips were written for a recent personal budget software program that I wrote. Since I like to inject inspiration into everything I do, I decided to include a “Tip of the Day” feature with this program. But, instead of displaying tips on how to use the program, I decided to offer inspiration for money management.
BTW: if you are interested in checking out the budget software (which I initially created for my own use), I am offering it for $5 on at fiverr.com for a limited time as I finish up some of the documentation and marketing. Click here to see my $5 budget software program. I am calling it Inspired Budget.
8 Inspirational Money Management Tips
- Know your priorities – What do you really want? What is important to you? Life is full of distractions and money often tops the list of distractions. When you establish a budget and a sound financial plan, money issues lose their grasp on your conscious mind, allowing you to enjoy the things in life that really matter to you. It may be fun to imagine making impulse purchases you can barely afford, but is it worth the distraction of living paycheck to paycheck? Set your priorities based on your passions and live for those, not for money.
- If money were not an issue… – What would your life be like if money were not an issue? What would your priorities be? How would you spend your time? What kind of work would you do? Fantasize about that for a while and write about the ideal life you would experience. Set goals based on this fantasy and you will rarely struggle to find motivation to stick to your budget and meet your financial goals.
- Develop a budget – The first step in any sound financial plan is developing a budget. All other financial goals – saving, debt payoff, investing, etc. – can only be achieved with successful adherence to a sound budget. To develop your budget, create envelopes for your expenses, discretionary funds and savings based on your past behavior [Inspired Budget has virtual envelopes, but you can use physical ones as well: a.k.a. “granny envelopes”]. Monitor your spending and make adjustments to your budget over time.
- Keep Accounts Current – To maintain financial success, pay your bills on time and keep your accounts current. Late charges, extra interest and fees incurred with late payments can turn you budget upside down in the short term. In the long term, damaged credit can cost you with increases in interest rates, fees and even insurance rates. Once you have established a successful budget, keeping accounts current should be a simple matter of vigilance.
- Establish an emergency fund – Once you have a sound budget and are keeping your debit accounts up to date, establish an emergency fund. Even if you have debts to pay off, it is a good idea to have at least a $1000 emergency fund so you don’t have to fall back on credit if an unexpected expense arises thus undermining your debt repayment plans. Once your debts are paid off, especially non-secured and high interest debts, grow your emergency fund to cover 3-6 months of your expenses
- The purpose of an Emergency Fund – Once you establish and maintain a significant emergency fund, you will never have to use credit against your will again. The emergency fund should carry you through short term loss of income or unexpected major expenses without using credit or damaging your credit rating. Resist the temptation to use your emergency fund to make purchases that are not immediately necessary. Plan your major purchases ahead and save for them separately. Stick to your budget and your plans will become reality sooner than you think.
- Plan your purchases rather than charging them – If you can’t afford to buy something you want right now, how do you expect to be able to pay for them later with added interest and fees? When you plan and save for purchases, it costs you less and gives you time to consider whether this is how you want to use your money. In the long term, this means you end up with more money, your buying power is increased, and you have quality products that you truly want instead of accumulating a bunch of stuff to clutter your home.
- What is the meaning of life? – What the heck does that have to do with your budget? Well, every financial decision you make should resonate with purpose and meaning. If your financial goals are in line your life’s passions and sense of purpose, you will have the motivation, drive and inspiration you need to make your financial dreams reality. The next time you get an urge to buy something you don’t need or can’t afford, if you know your purpose and are passionate about your goals, you will have no problem making the right decision.
There are 16 tips in total so far. I will post the remaining 8 tips next week.
In the meantime, if you’re interested in more information about my Inspired Budget program (which I am obviously very excited about ;)), please check it out.