If you were to ask them, most people would admit that they are not in control of their day-to-day finances.
Anything in life that is out of control – even slightly – is preventing us from being all we can be.
It doesn’t have to be this way, though. With some know-how and a little practice, you can become an accomplished money manager by setting and living by a budget. You can tame your finances to obey your wishes and enable your dreams.
When training your money, the best place to start is with that most volatile piece of your financial jigsaw: your living expenses – by which I mean groceries, petrol, coffees, take-away food and meals out. Just think of living expenses as being food and drink for you and your car.
Firstly, work out how much you need for these each week.
Secondly, withdraw this amount from the ATM on the same day every week and use this cash to make all of your living expenses purchases.
Thirdly, park the plastic – both credit and debit cards, so you don’t lose track of what you’re spending.
With this set amount to live off, you’ll think harder about how much of your cash you spend and what you spend it on.
If you do have any cash left over at the end of the week, put the surplus aside for a rainy day and withdraw the same amount the following week. If, on the other hand, you are running short by the end of the week . . . make friends with the contents of your fridge!
The key to the success of this weekly cash routine is to make it predictable to the point of being boring – just like the engine of a shiny new car. Predictable and boring is good, as any successful fund manager will confirm.
Just like a new engine, that’s when your finances take you places you would never have dreamed of before your money makeover. When you feel in control, confident and empowered. When you get to experience your own amazing and unlimited potential.
David Rankin is an author, public speaker and founder of the personal budgeting service Sort My Money. This article does not offer personal financial advice.