4 Tips to Become a Money Management MVP

Money management is like having a game plan for your cash. It's all about making your money work for you, so you can live your best life. Don't worry, it's not rocket science. We're here to help you dominate your finances.

If the thought of managing your money feels daunting, take a deep breath and take it one step at a time. These tips will help you gain control, peace of mind, and reach your financial wellness goals. Let’s get started!

1. Know Where You Stand

Before you can tackle your finances, you need to know where you stand. This can be a little intimidating to some people, but don't worry: you don’t have to do it alone and unprepared. By simply taking a step back and assessing your financial position, you can gain a better understanding of where you're at and what you need to do to move forward. Take a deep dive into your current financial situation and ask yourself:

• Am I spending more than I make, going into debt, or exhausting my savings?
• Do I have enough saved when life throws me a curveball?
• Do I spend every week waiting on my next paycheck?
• Do financial terms leave me feeling lost and unprepared?

You have to start somewhere - the only worse plan is never starting at all! So don’t be afraid to take an honest look at your financial situation. That’s the first step in your journey toward financial wellness because it gives you the knowledge to move forward. 

Once you know your weaknesses, you can start making changes to improve your financial game.

2. Create Your Money Management Gameplan

Now that you know where you’re starting from, it’s time tocreate your budgeting game plan. 

Here’s how:

• Start with a budget: Choose a budget plan that works for you. I recommend the 50/30/20 plan, which allocates 50% of your income for needs, 30% for wants, and 20% for savings or debt repayment.
• Track your spending: This is absolutely critical! Everyone, wealthy or not, needs to keep an eye on where their money is going. It will allow you to make adjustments to align with your goals.
• Find ways to save: As you focus on your finances, you’ll find opportunities to save. This will help you see what’s necessary, what’s not, and identify areas to cut back your spending on. From simple tweaks to big lifestyle changes, once you dig down into the specifics, you’ll find there are many ways to cut spending and improve your financial game.
• Tackle any debt: Now you know where your money is going, you can most likely redirect some of it to pay down your debt. Having a strategic approach to debt repayment will help you reach the debt-free finish line faster and move on with your life. Debt that’s accruing interest can be a dangerous drag on your finances and slow down your financial progress, or block you from advancing entirely.
• Separate your savings: Keep your spending away from your savings whenever possible. Some savings are for emergencies, so if you are experiencing that, you’ve just got to use it. But other than that, keeping savings separate reduces the temptation to spend your savings and helps you reach your financial goals.
• Use and build your credit wisely: Your credit score affects many aspects of your financial life and future, including big-ticket items like your house and your car, so focus on paying everything on time and using less than 30% of your credit limits. Credit cards are flexible and can earn great rewards, so I don’t tell my clients to avoid them entirely as a rule.
• Invest in your future: Start saving now for a brighter financial future. Consider a 401(k) or an IRA to let compound interest do its thing.

3. Make the Most of Your Savings

Money management is more than just spending less than you make (though that is where you start!). It’s about saving enough to live comfortably in the future. 

Here’s how:

• Eliminate your debt: Make at least the minimum monthly payments to avoid damaging your credit score. Paying down your highest-interest debt first is a common recommendation, since this inflicts the most pain on your financial health.
• Have extra cash on hand: Start building an emergency fund with extra money. Aim for six months’ worth of living expenses, or start small with a $500 reserve.
• Make some investments: Put extra money towards your future by contributing to a 401(k). If your company offers a match, don’t think twice: that’s literally free money!
• Stay in it to win it: Keep building up your emergency fund, investing for retirement, and paying down debt.

4. Stay the Course

Money management is a marathon, not a sprint. Don't let a few setbacks or fumbles discourage you. Just like in any sport, it takes time, practice, and perseverance to become a financially fit champion. Take the time to learn and understand the game of money management, and keep pushing forward with hard work and dedication. 

Before you know it, you'll be executing your solid financial game plan on a daily basis and gaining the skills and the peace of mind that comes with being in control of your money. So don't give up, stay the course and keep striving towards your financial goals. Champions are made through consistent effort and determination: just takethe first step toward financial fitness!