As I have mentioned many many times before personal money management is very important. Keeping your life and money organized will help you to know exactly where it all needs to go and where it really ends up. This is not an over night process by any means, it will take time, persistence and Patience to get the hang of it all. You have to make it a part of your everyday life by sticking to your budget, monitoring your money and actively working towards your financial goals.

When most people realize the need to learn personal money management they are in a critical situation. I suggest you take baby steps when you first start and try to read and learn as much as you can in order to build a good foundation. Take the time to learn why and how to automate your money before you run to the bank and set up a bunch of savings accounts. Knowing what a budget is and the purpose for one will make it much easier to create one and stick with it. Personal money management is a life skill that you will continue to use for years to come so, rushing and taking short cuts will only hurt you in the long run. There are many blogs/website, seminars you can attend and book you can read to get you started on the road to the riches. The local library has all the book you could ever want for free, all you need is a library card.

I know many will read this and want to take action, but will never take the first step. If you found your way to this site and have read this far it is very likely you need to learn to manage your money better. As far as I know for one reason or another everyone needs money and it does not matter how much you have you will always think you need more. There will always be new things to buy, places to go, bills coming in the mail and they all require money. The more you know about personal money management the easier it will be to buy these things, go to these places and pay your bills on time. So, not taking the time to learn is your option and it will always be true that not knowing is not an excuse. I will even go as far as to suggest a few books for you to read. I will teach you to be rich by Rami Sethi, personal finance for dummies by Eric Tyson, Think and grow rich by Napoleon Hill (Any of his books really) and The millionaire next door by Thomas J. Stanley and William D. Danko the rest is up to you.

Till next time remember money is only a means to an end.

I am a planner, I plan every little move I make. I am so good at it I only write down my mid term goals and long term goals. This has help me to complete almost every thing I have done through out my life financially and other wise.  If you take a look around you everything you see was planned in one way or another. It was the plan of Sony, Compaq, Gateway, Dell, Apple, or which ever brand of computer you are using to get you to buy it. If Apple had failed to plan its design, manufacturing, advertising, and distribution you would be using another brand right now.

Everyone needs to have a personal financial plan, without it you will be flying blind, you would not know where your money needs to be or where it is going, but amazingly almost everyone I know has a stupid look on their face when the subject arise. Yes, it will take time and research to put together a good financial plan and yes it is just as boring as watching a box of printing paper, but take a minute and think of the alternative. Think about how much planning it takes to put together a decent birthday party, and think what would happen if you did not take the time to plan said party. Your little sister might end up being the DJ, Pizza Hut would be the caterer, your living room would be the dance floor and only the people that feel obligated to celebrate your B-day would drop what they are doing for your last minute invitations. Well, finances are far more important than any birthday party, but most people spend more time planning a party then they do their financial future.

The #1 answer I get when I ask why don’t you have a Personal financial plan is “I don’t know where to start.” In his book I will teach you to be rich Ramit Sethi makes two unarguably point. He states that you don’t need to be a financial expert and starting making your financial mistakes early is better than not starting at all (Not his exact words but I’m feeling too lazy to go and get the book right now). The odds of you making a catastrophic mistake is pretty much the same as not having a personal financial plan at all. So, my answer to everyone that gives me the “I don’t know where to start excuse” is “$1,000 in a Roth IRA will earn you no less that $3000 in profit you never have to worked for In 40 years. If you add another $1,000 a year you will earn over $100,000; now thats a pretty expensive excuse.”

I do not think personal financial planning should be an option, it should be taken out of people salaries along with taxes, but it is an option. It is left up to you to prepare for your future and you can make all the excuses you want because your not cheating anyone but yourself and your children.

I was reviewing some of my future articles and realized that I constantly tell you to start a budget, but never explain how. Well, today I will explain the steps to creating a budget designed just for you… by you of course. You will need pen, paper, copies of all your bills, and to make a list of everything you will spend money on in the next 3 months. It is important to remember that a budget is not meant to restrict your spending, it is to help you become a better spender and a better saver of your money.

Making the list:

The first thing you need to start doing is to make a list of everything you buy over the next 3 months. This is not required to start your budget, but you will need it to help you fine tune your budget later. This will provide a visual of where all your money goes and help you to cut spending. Take a small notepad with you and write down everything you buy and how much it cost. Do not leave anything out, you will only be cheating yourself.

All That You Make:

Now you will need a list of all your income. If you are paid on a weekly or bi-weekly basis, try to add it up so you can view it as monthly amount. Make sure you list all your income, if you leave out any it will throw your budget off. Include your online auctions, stock trading, Adsense, and any other source of earnings you have.

Bills Bills Bills:

You will also need a list of all you monthly expenses. Mortgage, insurance information, car payment, entertainment, utilities etc…. Do not forget to include things that you do not get a bill for, such as church offerings, Starbucks coffee, trading software fees, Itunes and Iphone apps. It is very important to include entertainment expenses, this is a part of your life and should not be left out.

The moment of truth:

After you have all these listed, total the amounts and subtract you monthly expenses from your total monthly income. If your income exceeds your bills, use the extra to pay off your debts faster or add to your retirement. If your bills exceed your income you will need to cuts some expenses. Try starting with the things that you can live with out. If you are paying for things you do not use cancel them and redirect the money towards other bills. The 3 months list of your expenditures will help you to find other places you can cut expenses as well.

Once your income and your bills are equal the next step is to automate the paying of your bills. This will keep your bills paid on time and your savings growing without you lifting a finger. I will get into automating your bills next post, I try to keep my posts short, so they are quick easy reads.