Do you have a proper money management system set up for yourself? Why is it important to have one? Have you ever forgotten to pay any of your bills on time? Have your ever misplaced any of your financial records? Are you often clueless as to how much you have in your various bank or investment accounts? If you answered ‘yes’ to any of these questions, then you probably need a proper money management system to prevent any of these incidents from reoccurring again.
Having a proper money management system simply means establishing a set of tasks that can assist you in reaching your financial goals. Below are some examples of money management tasks.
• Prepare a spending plan / budget plan (monthly)
• Pay utility bills (monthly)
• Pay credit card bills (monthly)
• Pay house mortgage and car loan (monthly)
• File finance related documents / financial records (monthly)
• Analyze net worth (yearly)
• Complete income tax return (yearly)
• Review financial portfolio (yearly)
• Review insurance needs (yearly)
• Review retirement plan (yearly)
Looking at the tasks above does not look so intimidating after all as you are probably doing some of the tasks consistently already. It is your responsibility to ensure each one of the tasks is completed according to schedule.
If you are thinking that it is still a lot of work to do, then use the computer and internet to simplify your life. For example, you can use online banking to pay your bills, monitor your account balance, create a spending plan, etc. If you are computer savvy and like the idea of using financial software, below are some tasks you can do to manage your finances even more efficiently.
• Create financial graphs and reports
• Put all your accounts in one place
• Do a daily or weekly tracking of your expenses
• Analyze your spending history
• Keep track of your assets, liabilities and net worth
• Set up reminders for bill repayments
Do a search for ‘free financial software’, ‘financial software’ or ‘financial tools’ and you get a lot of choices to try on. Examples of often-heard financial software are Quicken, Mint, Mvelopes and Myspendingplan.
OK, you have reached the bottom of the page. If someone asks you about money management, you are not in the dark about it anymore. Hopefully, reading this article has given you some ideas on what you can do or should do to manage your money and put a money management system in place.
Do you have a system already? Is it helpful?
Jacquelyn is the co-author of the books “Teaching Your Kids About Money” and “Top 93 Personal Finance FAQs in Malaysia” with KC Lau. Jacquelyn is the pseudonym used by Amy Sipagal.