Money Must be Managed

Money must be managed. On its own, it does nothing. For me, the first step was finding out where I was spending it, by tracking all spending. I also tracked all money coming in. I started with a paper and pencil system. Now I use an electronic spreadsheet, that allows me to download transactions from my bank every week, including credit card purchases, and sort them into categories and subcategories so that I know what my life, my choices, cost.

With these numbers, I was able to manage my cash flow. I knew when I would be paid, and what my take home pay was. With that information, I was able to plan my spending. I learned to include non-monthly expenses. Some are predictable, such as car registration, vacations, holidays. Some periodic expenses are not predictable, perhaps medical expenses, car repairs, home maintenance. Now that I am self-employed and my income is less predictable, tracking allows me to manage my cash flow and remain debt-free.

With these systems in place, I am the driver of my money and my life. I plan my spending, monthly and annually.  I review my plans frequently and adjust them because, well, life happens. I plan, save, and invest for my future.