Money management can be a daunting topic.  The truth of the matter is that many people do not know how to manage money.  What typically happens is that money will manage people instead of people managing their money.  The first step to understanding how to manage money is realizing money is a powerful tool and resource.  It is not a precious commodity that is in short supply.  Your mindset around money will determine how you treat this tool and resource

You should set SMART financial goals.  In other words, your financial goals should be specific, measurable, attainable, realistic and time sensitive.  Your financial goals should also be limited to three areas of focus for any given period of time.  I always say, “A broken focus will leave you broke.”  Too often, we try to focus our financial goals across too many areas.  It becomes overwhelming, unattainable and unrealistic.  Decide what your top three financial priorities are and begin there.

I also believe you should give your money an assignment.  In other words, know where you are going to allocate your money before it is even earned.  Assign your windfalls and unexpected financial blessings, as well.  When the money shows up, you already know what to do with it because it has already been purposed.  No matter what, do not allow circumstances and individuals to derail you from your money assignments.  Two assignments for your money should always be to 1) donate to a charitable cause or local church and 2) retirement and emergency savings.

Donating to a charitable cause or local church makes us civically and socially responsible but it also allows you as a taxpayer to take advantage of tax deductions for such contributions.  Once you establish a savings plan, defer a portion of your income for retirement purposes.  Then allocate a portion of your income to your emergency savings fund.  Typically, an emergency savings fund should be $5,000, at a minimum.  This emergency savings fund should be at a bank or credit union that is not easily accessible nor do you have a debit card.  Remember, this is an emergency savings account, not a slush fund or moneys to be used for routine expenses and purchases.

Also, beware of cash leakages of your money.  Frequent visits to the Automatic Teller Machine (ATM) can derail your finances.  Utilize one debit card for your routine purchases for gas and groceries.  Have your mortgage, car note, utility bills and insurance payments deducted from one checking account, too.  I encourage you to monitor all of your expenses for one month to discover where your money is actually going.  It is important to know and understand what you are doing with every single dollar.

Do not allow your money to control you.  You control your money!