How to Manage Your Money

Develop a plan for overseeing your money today, tomorrow and in the future.

We won’t beat around the bush: managing your money can be intimidating — and stressful.

If you’re feeling overwhelmed, taking a few simple steps now will help you gain control and, more importantly, peace of mind.

The right frame of mind

Mastering your money is about more than making the math work out. It’s about adjusting your mindset, too. As you begin to take charge of your finances, you’ll change your philosophy as much as you change your day-to-day habits.

Take a mental inventory of your current position.

  • Are you consistently overspending?
  • Do you have enough saved up to survive an unexpected expense?
  • Do you live paycheck to paycheck?
  • Do you feel overwhelmed by financial jargon?

Be honest with yourself about where your weaknesses lie. You might’ve made some missteps in the past, but you don’t have to continue on that path. Here’s how to manage your money now, while preparing for the future.

Mastering your money is about more than math. It’s about adjusting your mindset.

The 4 steps to money mastery

Money mastery goes beyond spending less money than you make. A true sign of financial prowess is saving enough to live comfortably in the long term as well as the short term.

You can achieve this in four steps: save, invest, pay off debt, repeat.

1. Save

Start socking away extra money to build an emergency fund. Ideally, you should have three months’ worth of living expenses at your disposal in case the unthinkable happens. If that seems too ambitious, start small. A $500 reserve is a great first goal.

2. Invest

Invest your extra money for the future. Set yourself up for retirement by contributing to a 401(k). If your company offers a match, contribute enough to get the maximum.

3. Pay off debt

Whether it’s a loan or looming credit card bill, you probably have some debt obligations. Always make at least the minimum monthly payments so you don’t fall behind. If you have extra dollar bills to throw at your bills, pay down the high-interest debt first.

4. Repeat

Keep building up that emergency fund, investing for retirement and knocking down your debt.

Your money management blueprint

How do you put your savings plan in action? Just like gaining physical muscle, you have to start with the right equipment to gain financial muscle.

Dollar-cost averaging

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Develop a roadmap for spending

Track your money

Find extra cash you didn’t know you had

Separate money you need month to month

Park your savings in a different account

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Set up your future self for financial freedom

Persistence pays off

Despite their good intentions, many people fall off the financial bandwagon. Sticking to a budget that’s too restrictive can be suffocating. Navigating investment jargon can be confusing. But don’t get discouraged.

You didn’t get to the financial position you’re in overnight, and you won’t get out of it overnight, either. Give yourself time to learn and grow. With hard work and dedication, you can manage your money with confidence.