Google how to manage your money, and most of the results will be about budgeting.
I know, because when I started my current job I went through exactly that exercise. Budgeting, okay, I get it. I’ll be honest, I’ve never been a budgeter (Gasp! Horror! Travesty!)
Here’s the thing – a budget is a tool to help you manage your money. And I think a budget can be helpful for many people, but I’m not of the mindset that everybody must budget. But I do believe that everyone needs to manage their money. You may remember that this was one of the Key Takeaways from The Millionaire Next Door.
In my new position I needed to be able to explain to students what that meant. (It’s like they say, you know that you understand it when you can teach it. )
After much searching, I finally found something online that was useful and what it basically said is that managing your money means making sure that there isn’t more going out than coming in.
Boom!
Yes! That’s what I’m talking about! Straight to the point and easy to understand (and I apologize that I no longer have the source for this pearl).
So, what I explain to students is that this is the very basic level of managing our money. And while that’s certainly better than not managing our money (which can lead to overdraft fees, heavy use of credit or worse) – to get beyond living paycheck to paycheck we want to include having savings as well as an emergency fund and saving for our future and other important goals.
Ultimately, money is a tool to help us. A budget is a tool to help us manage our money but whether you use one or not, be sure that there isn’t more money going out than coming in and that you’re including savings for emergencies, retirement and other goals that are important to you.
How do you manage your money? Do you budget? Do you have an app that works well for you? Let us know!