Money Basics

Eight steps to better money management

As you work toward managing your money more effectively, keep these steps in mind.

1. Plan ahead. Write down your goals and objectives. It's important to be realistic. Will you more likely be able to afford a $200,000 house or one that costs $100,000 or less? Review your goals and objectives regularly to see if you are on track.

2. Create a budget. Create a plan on how you will spend and save money. Update it regularly, and evaluate your goals. Think about your financial situation, where you need to be, and determine how you're going to get there. (You'll learn more about creating a budget in the next lesson.)

3. Keep good records. It's difficult to get your finances under control if you don't understand the basics of good recordkeeping. Keeping track of your bills, checks, and other financial transactions is important.

4. Stay insured. Purchase insurance to avoid being hit with a financial loss due to accident or illness. It's an important part of your financial plan.

5. Stay focused. You'll need patience and discipline to begin your financial plan and to follow it through. Don't be tempted to overspend.

6. Save more. It's important to save money regularly so you can use it in the future. Begin by faithfully saving a small amount. If you are able to save enough money, you will be able to put some into investments, use it in emergencies, or use it to reach your goals.

7. Educate yourself. No one can protect you from your own bad judgment. Get the information you need to avoid financial trouble, and make thoughtful decisions that can improve your financial security.

8. Take time. Set aside time each month to work on your money management. Pick a time that works for you, such as early in the morning when everyone else is asleep or quiet time at night. You will find that it's time well spent.