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Managing Money For Dummies Cliff NotesUntil managing money for dummies hits the book shelf, consider this the cliff notes because we're going to keep this basic...and I mean basic. Let's dive right in.
Money is the only completely liquid asset you have in your portfolio. Its power is what makes it so valuable. It is the one of the very few instruments that can be quickly and easily exchanged for whatever goods and services you might want. As such you don't want to take it for granted. Rather, you'd be wise to handle it with the respect it deserves.
However, at no point should it become your master. It is there to serve you and not the other way around. Nonetheless, because it mainly serves as our protection, we should show a responsible attitude toward it. So how do we do that? The answer to that probably formed the basis of your search for managing money for dummies, I bet. Here's how:
Step 1. It all starts out with finding out where all your money is disappearing to. The only way you can do that is by making a list of your expected expenses. It's that simple. Your work is half done. Now onto the next step.
Step 2. Keep track of your actual expenses for about one month or two if possible. By the way, have you noticed I haven't said anything about a budget yet? Too many times people mistakenly think that they have to start with a budget. Why? I simply don't know. But it certainly doesn't make sense. Does it? After all, a budget is simply a way to manage the spending and saving of your money. And I submit to you, you can't manage what you don't know. Anyway, I digress.
Step 3. Establish spending goals based on what you tracked from the past month or so. You can do that using something as basic as envelopes for each of your expenses or electronically (with the use of spreadsheets if you're comfortable). This is the step where those who have attempted to start this process fail. For each expense, you must come up with a realistic figure for how much should be set aside for it. Otherwise, the whole thing will blow up if the amount set aside is so small you can't get through one pay period on it.
Here's a sample of a basic expense sheet to get you started as you wait for managing money for dummies to come out.
Well, I promised this would be basic and I intend to keep that promise. What you just read can be considered cliff notes for managing money for dummies. I purposefully kept it simple because we tend to put off the complex for another day. If you can do these 3 simple little steps, you'll be way ahead of the game in managing money for a happy retirement. Go From Managing Money For Dummies To Sign Up For My Retirement Planning Newsletter
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