5 Simple Steps to Take Control of Your Money

The key to your financial future

When people tell me “If I just had more money, all my problems would go away,” I respond by saying “The truth is, more money will never be enough until you learn how to manage what you already have.”

This may sound heretic in a world that’s ruled by money, and it may sound contradictory to many people’s beliefs about the power of money. Yet, by learning how to manage your money sensibly and putting a financial plan in place that will fund your current and future lifestyle, you are actually making money your servant, instead of being a slave to the dollar you don’t have.

In this article I will be outlining 5 simple steps you can take to better manage the money you have and make the most of it. It’s simple, but it may not be easy, as it will require you to shift your thinking about money and commit to a plan of action.


Step 1 – Establish and define your life goals

Set your life goals before thinking how you want to spend your money. Think about what you want to spend it for and why. Set short, medium and long term goals and write them down – this is key! A case study undertaken to learn how people achieve their goals revealed that 96% of the people who wrote their goals down, achieved all of them. You can become one of the 96% just by following this step. Click here to read more in my article on “How to secure your financial future without winning lotto”.


Step 2 – Get personally and financially organised

Yes, I am talking about keeping your records in good order. Those of you who have experienced the unexpected will know how critical it is to be able to locate important documents quickly when you need them. Sort through your personal documents, receipts, invoices, bank statements, insurance policy papers and anything that could be of importance for your tax return and put these documents in order. If you need some help with that, click here to read my article ”How to get your paperwork organised for financial success”. You can also visit www.financialindependencekit.com and download the Kit which includes a copy of my eBook “How to create the ultimate record keeping system”.

Step 3 – Assess your current position

You need to keep a close eye on your financial position to make sure you are staying on track to achieve your goals. Start by recording everything you spend for one month and work out what your Net Worth is by itemizing your assets and liabilities. If this exercise tells you that you’ve been living beyond your means, it’s time to correct your course. If you find that you haven’t been spending your money in the areas that are important to you, make adjustments in your budget for it.


Step 4 – Establish a budget plan

Use the data you’ve gathered in Step 3 to develop a budget plan that’s geared towards meeting the goals you’ve defined in Step 1. By linking your spending to your goals, you can be sure that you don’t waste your money on something you don’t really need and can’t afford, if you are being realistic. Sure, we all want things, and the kids might be pounding you to buy them the latest gadget, but this is where you need to learn to say NO and set some boundaries. Click here to go to my website to request a copy of my Budget & Savings Planner, which also includes a Goal Setting Planner.

Step 5 – Rectify problems and/or address opportunities

Now that you’ve got all the controls in place to monitor your financial position, make sure you use them. After three months of following your new budget plan your should have the information to identify the 10 highest expenses from your budget and see if you can reduce them, for example by shopping around for an alternative insurance policy. If you have significant debts, eg a personal loan, a mortgage or a full credit card attracting exorbitant interest rates, try to reduce the debts quicker by redirecting savings you can make through the review of your budget expenditure plan. You’ll be better off for it in the long run.

As you can see, the 5 steps above are not rocket science. All you need to do is to commit to taking action and keeping yourself motivated to stay on track. Easier said than done, I hear you say? Ok, that might be so, but I truly believe that people can achieve anything they set their mind to. For more help with the 5 Steps, click here.

Copyright © 2012 Robert Bauman. Feel free to use this article in your hard copy or eNewsletter, provided you display the Copyright notice and source reference in its current form.

Disclaimer: This information (including taxation) is general in nature and is for Australian residents only. It does not consider your individual circumstances or needs. Do not act until you seek professional advice and consider a Product Disclosure Statement. To find out more about services provided by Straight Money Talk Pty Ltd please visit my website.