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Thoughts from your Systems Goddess, Sandye Linnetz, Process Prodigy
I just finished reconciling my bank accounts. And they balanced!!! I actually look forward to getting my statements and doin’ the math. The first step to good money management is knowing what you have and where it is… Step two, as you probably guessed, is having a strong and effective system in place to stay fiscally aware and, of course, solvent.
The benefits of a money management system are many-fold. Aside from the obvious; you don’t spend more than you have and you pay your bills on time, your accountant will love you at tax time and you may actually be able to sleep better at night! Burying your head in the proverbial sand will not allow you to take charge of your financial situation at any time… let alone these troubled times.
Let’s look at some possible systems you may want to add to your life. Foremost, of course, is a system for actually knowing what you have and where it is. If you have a computer program for tracking, “good on ya”. (Sometimes it’s as simple as using Quicken or another like program). Note: As with any other system, even Quicken won’t help if you don’t stay with it and keep it up to date.
Analogy time: When you want to loose weight you think diet and exercise, don’t you? You generally start by becoming aware of what you eat and how much you do physically. Sometimes taking responsibility for your weight involves simply keeping track of what you eat and how much exercise you get. What foods and drinks – and in what quantities – go into your body? When are you most prone to eating those “extra calories? When, where and how much exercise do you normally get?
Now, following that system, begin making written lists. How much money comes in… and from where? What do you earn? What incoming funds are recurring and how much comes in randomly? What do you have in savings - and where is it? Next, what are your fixed and/or recurring expenses (rent or mortgage, car payment, etc.?) and what are your “regular” random expenses (taxes, magazine renewals, hair cuts – get the drill)? It will really benefit you to actually write out where your money goes… maybe even keep a financial diary for a few weeks. You’ll probably amaze yourself when you find out just how much you actually spend on misc. “stuff”. Naturally you’ll want to list all of your bills – and look back to see what you generally spend on necessities like food, medications, running your household and maintaining your lifestyle. Clothing, cleaning, personal care and auto maintenance may be taking a bigger chunk than you realized!
And savings… I laugh when people tell me that they can’t afford to put any money away. I have yet to meet anyone who doesn’t waste money that could become an emergency fund. Have one less Starbucks every day and put that in the bank. I’m sure that, if you keep a money diary, you’ll see where you could cut and save. Your bank has all kinds of plans for you to follow. Even a Christmas Club works!
Okay, once you have actually determined what comes in and what goes out, it will be time to make some serious decisions. Can you actually afford your lifestyle? If the answer is yes – congratulations! If it’s no, start making some choices… When you are being responsible about your financial shape you’ll notice what is out of sync and what is working.
Your checking account is a great tool for managing your money. As you spend, record it and note a category. Many on-line programs will actually track everything for you. And, hey, balancing that checkbook on a monthly basis will actually keep you on target. YOU CAN BANK ON IT!
© 2008 Beth Schneider, Process Prodigy, Inc. Want to reprint this article? Feel free as long as you include the following: Beth Schneider, President of Process Prodigy Inc., www.processprodigy.com, along with her team of highly sought after operations consultants, reveal the insider secrets billion-dollar corporations pay thousands of dollars for. Specializing in process creation, Process Prodigy tools and techniques have helped entrepreneurs increase productivity by as much as 600%, and revenues by as much as 250%. Visit www.processprodigy.com/ezine and grab your FREE systems starter kit valued at $297.00.
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