What do I Need to do to Begin Gaining Control of My Money?
Four Essential Steps!
What are the fundamentals that you need to have in place to gain control of your money?
The Tools:
- List of Assets or things that you own.
- List of Liabilities or things that you owe.
- A register or list of money transactions.
- A budget or spending plan.
List of Assets that you own:
This list is the place to begin. The list the assets includes cash on hand, checking account balances, savings account balances, retirement balance and other investments. This list includes items that you could easily convert to cash. The only other asset type that should be included in this list is real estate that is in your name. For this list, do not include items like furniture or vehicles because of their rapid depreciation.
List of Liabilities that you owe:
List any and everything that you owe. Debts like car loans, credit cards, title or payday loans, student loans, loans from friends and mortgage loans. List them all. If you agreed to pay, list it.
These two lists will give you numbers that you can use for keeping track of your progress, sort of like your scorecard. Over time, you are looking for your Assets to grow and your Liabilities to decrease.
Put today’s date on these lists for future reference.
Transaction Register:
A register is next on our list of Important Tools. A register is simply a record of transactions. All transactions should be tracked. From your mortgage payment to $15.00 for gas at the Shell Station should be listed. A $2.25 hamburger at McDonald’s should be listed. $25.00 received for mowing your neighbor’s lawn should be listed. It is very difficult to make progress with your money if you do not keep a record of income and expenses.
You can track your money transactions using pencil and paper, a basic spreadsheet or an app for your phone or computer.
Spending Plan:
The tool to tell your money where to go is called a spending plan or the B word – Budget. In its simplest form, you list your anticipated income for the month and your anticipated expenses. It takes several months to begin to see your budget reflect your income and expenses accurately. The main thing is to begin and be persistent.
Take Home Notes: It takes effort to pull these tools together. Each step of progress will help you build a little more confidence in your ability to manage your money!
Would you like help understanding and implementing these tools?
Complete the contact form to reach out to Russ Bell or email directly at russ@russbellmoneycoach.com
