Are you the boss of your money? Or is your money the boss of you?
Your money is the boss of you if:
- you say “I can’t afford that right now”.
- you say “I wish I could but I don’t have the money”.
- you say “I get paid on Friday.” (People who boss their money around don’t worry about when the next check is coming because they aren’t living paycheck to paycheck)
- you feel jealous of others when they get something new.
- you worry that others will find out your true financial situation.
- you pay late fees.
- your financial situation keeps you from doing what you truly want to do
- finances keep you up at night.
- you stay in a job you hate for financial reasons.
- you stay in a relationship you hate for financial reasons.
- your debt is growing.
- you don’t know how much money is in your account.
- you fight with your spouse about money.
You are the boss of your money if:
- you say “That’s not a good value”.
- you don’t care what day of the month your bills are due.
- you are debt free (or working on it)
- you have multiple income streams.
- you know exactly how much money you have in your account right now.
- your bills are paid on time.
- you haven’t paid a late fee in years.
- you know how much you are saving each month.
- you decide ahead of time how you are going to spend your money.
- you could live for a while with no income if necessary.
- you see the signs of financial chaos in others.
- you discuss money with your spouse, but don’t argue.
- you are proud of the financial decisions you’ve been making.
- you sleep well at night knowing your money is there for you.
Which list do you identify with more? Are you the boss of your money or a slave to it? If you aren’t the boss there are some things you can do to change that. Believe it or not your money wants you to be the boss. You just have show it that you mean business and stop letting it get away with all the crazy stunts its been pulling.
Set a budget. I know you’ve heard that one a million times but a budget is the best tool out there for bossing your money around. If you have trouble working with budgets then start just by tracking your spending. Tracking your spending for a month will give you a very good idea of how you normally spend money. Use that data to set a budget. Decide at the start of each month exactly how you are going to use your money and track your spending during the month to make sure you are on track. If you start to go over in a particular category then you will have to adjust the budget mid month. Going over in one area doesn’t mean that the budget is no good. Just make the needed adjustments and move on.
Breaking the paycheck to paycheck cycle requires some savings. The experts say to have a baby emergency fund of $1,000 available for use. That will give you some wiggle room for your day to day bills. If a bill is due on the 7th but you don’t get paid til the 10th you have a back up plan. No more worrying about how your pay days and due dates fall.
Debt is the next target. Once you are used to living on a budget you will probably see some places you can cut spending. Send those cuts to debt and pay it off by focusing on eliminating one debt at a time.
Once you have a budget and debt elimination plan you will feel like the boss of money!