There’s an old management dictum that says “You can’t manage what you don’t measure”. This holds true not only in business but also with personal money management.
A common mistake is to only take stock of your situation when you’re already feeling financial stress. You can avoid a lot of worries by keeping track of a handful of things in your day-to-day money management. You should know, or at least have a reasonable estimate of:
What your average monthly income is from all sources
What your average monthly expenses/bills
How much money you have in your bank accounts
The interest rate on any deposits you have
How much debt is on your credit cards and their interest rates
The interest rates on your mortgage and any personal loans and their balances
Keeping tabs on your account balances has never been easier. Today banks offer online access to your accounts, credit cards, mortgages and loans. If you’re not familiar with how to access online banking, ask your bank to walk you through the process. If you’d rather use paper statements, be sure to review them every month.
Many banks also offer online tools to help manage your spending habits, create budgets, set up and monitor progress to financial goals and even measure your net worth. Some even offer retirement planning projections. You can also use various apps to help you track you finances. If you’d prefer to use a paper system, check out my worksheets for calculating your cash flow and net worth.
Manage your money with greater confidence and keep your finances healthy by committing to set up a regular time, weekly or at the very least monthly, to look over your numbers.
