With the average American credit card balance at $11,000, there’s no time like the present to start managing our finances. Controlling personal cash flow can be difficult. For most people, the number one problem with money management is they just want more, the higher the amount, the better to support the "buy, buy, buy" culture. The other reason controlling finances can be complicated is due to the wealth of financial information available. Knowing where to start can seem overwhelming.

What is Money Management?

The term "budgeting" is sometimes used synonymously with money management. Budgeting is simply a means to visualize how much money is coming in, going out, and how it’ll be used in the future. After all your bills are paid, any surplus is "money in your pocket." Extending yourself beyond your means enters you into a liability, or debt.

Financial Management Tips

If your desire is to control your money, instead of the other way around, there are small but significant money principles you can implement now. Here are a few strategies to help you manage your money:

Track your spending - The first step to controlling your cash is to track where it goes. Do you know how much you spend in a month on food, rent, utilities, and entertainment? Write down how much money you use in a one-month period. There are countless software options and apps for your mobile device to track your spending. If you have bills you only pay once or twice a year, such as insurance policies, be sure to calculate what the monthly cost of those would be.
Make a monthly budget - Having a way to visualize cash flow is necessary for wise financial management. Allocate money each month to begin an emergency fund. This can then be used for unexpected costs that arise, and it’ll keep you from having to accumulate more debt.
- Look for money drains - Are you losing money in ways you could easily avoid? Taking a little time now to price-compare for utilities, phone, cable, and Internet services can really make a difference. Consider ways to trim your dining and entertainment budgets as well. Pack your lunch, borrow movies from the library, and cancel magazine subscriptions you no longer use.
- Avoid impulse purchases - Buying something you really don’t need might make you feel good in the moment, but chances are, you’ll regret it later. If you don’t have the cash to buy it, you shouldn’t really be considering it. Delaying gratification and shopping around for the best price can be exciting and rewarding.

Save first - Deposit the money you want to save each month right away.
- Pay youself - When you deposit your savings first, it ensures you’ll actually do it, rather than seeing what’s left over at the end of the month.
- Save for retirement - It seems obvious to save for the future, but we often prioritize the immediate for the long-term. Many employers offer matching programs for retirement or health savings. Take advantage of this free money. Today is the perfect day to start.

Pay bills on time - Avoid late payment penalties and damage to your credit score. If you struggle to remember, set up a direct bill payment plan through your bank. You can also make a bill payment calendar manually or through your mobile device.
Avoid credit card debt - If you’re unable to pay the balance on your credit cards each month, you should stop using them. It’s too easy to let your credit card debt grow faster than you can pay it off. Instead, work on paying off the balance to avoid high interest rate charges. Always pay more than the minimum suggested.
Know your long-term financial goals - What are your future desires? Would you like to own a home, a new car, or help your kids through college? Is there a certain age by which you’d like to retire? There are a variety of tools available online to estimate these costs and help you begin saving for them today.
Get your credit report and score - It’s important to periodically check your credit report and score for accuracy. Maintaining a high three-digit credit score can yield lower credit rates.
Reward yourself - Having a special purchase or vacation in mind can be a useful motivator to making small, daily changes. Think about how it will feel to have a credit card or other debt paid off. Consider how you can celebrate in a financially responsible way.

If you’re not in a good financial place right now, it won’t help feeling guilty over the money mistakes you’ve made in the past. Focus on the present and how you can make these simple, small changes to your everyday life. Wise money management will positively impact you and your family’s life and future.

Managing Finances

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