How To Be An Expert Money Manager

Wouldn’t you love to be able to call yourself an expert money manager?

An expert money manager is someone who takes their personal financial management seriously.

It is someone that is control of their finances and their financial future.

It is someone that tells their money where to go instead of their money telling them where to go.

It is someone that feels freedom from financial burden and can breathe easily knowing that if they manage their money well, they can have a great future.

Being an expert money manager means you have to put into practice part of that title: “manager.”

In other words, you must actually manage your finances.

You have to be intentional and not just sit back and let your paycheck show up in your account, pay some bills and then spend money on other things. There is so much more to it than that!

Expert money managers do the following things:

EXPERT MONEY MANAGERS BUDGET

If you want to be an expert money manager, then you absolutely must budget. There’s just no way around it.

Budgeting is important because it:

• Let’s you control your money instead of your money controlling you
• Will help you to not spend more money than you bring in
• Let’s you know exactly what you can afford
• Helps you save
• Helps you pay off debt
• So many more reasons!

I think a lot of people are scared when they hear the word budget because they think it means they are going to no longer be able to spend any of their money on anything fun. But that couldn’t be farther from the truth!

With a proper budget, you actually have more freedom to do what you want with your money because you know where every penny is going.

If you want to do something fun with your money – then budget it in! That is perfectly okay!

Unless you are trying to spend more than your income then you absolutely can still spend money on fun (even if you still have debt!).

Although I understand why it can be intimidating, creating a budget doesn’t have to be all that difficult.. The most time consuming part is when you create it for the first time but after that it usually goes pretty fast.

And if you use an app such as EveryDollar, it let’s you create next month’s budget based on the previous. So easy!

Related: 5 Tips to Help you Stick to Your Budget

EXPERT MONEY MANAGERS TRACK THEIR SPENDING

In order to know if you’re sticking to your budget, it is important to track everything you spend. And I mean every. single. penny.

This may seem tedious and a lot of work, but if you remember to do this step every time you make a purchase, it only takes less than a minute to do. And it actually saves you a lot of time in the long run because you won’t have to go back to fill everything in.

Tracking your spending is the only way to know if you’re actually sticking to your budget and staying under your monthly income.

I like to track my spending by using the app I mentioned earlier, EveryDollar.  After I make a purchase, I just pull out my phone and record it. Because I also create my budget in this app, it let’s me know how much money I have left to spend for the month. This is so helpful to me! If I am getting close to going over my budget then I know I need to make adjustments.

EXPERT MONEY MANAGERS BALANCE THEIR CHECKBOOKS

Many people think that balancing a checkbook is outdated because checks are so rarely written these days.

But the truth is that “balancing a checkbook” is really just a title for making sure you know what is in your checking account. Yes, it includes checks if you write them, but it also includes debit card purchases, withdrawals, deposits, payments, and interest earned. So let’s just call balancing our checkbooks balancing our checking accounts. Because that’s really what it is.

I also hear the excuse that checking accounts don’t need to be balanced because you can just look online to see what is in your account.

While it is absolutely true that you can take a look at your account online (and that you should look at it online often to see the activity!) that is no excuse to not balance it.

The following are a few examples of how not balancing it could hurt you:

• You forget you have automatic payments coming due and spend money that should have gone to bills
• There is an outstanding check someone has been holding onto instead of cashing
• You have fraudulent transactions on your account and you don’t even notice because you have too much activity going on

Bottom line: Balancing your checking account will ensure you never overdraft. And I know this first-hand after working at a bank. – so many people overdrew their accounts for reasons like this!

EXPERT MONEY MANAGERS GET OUT OF DEBT FOR GOOD

Expert money managers do not keep or obtain new debt (the only exception would be a mortgage).

Being able to afford monthly payments for something does not mean you can actually afford the item. In fact, unless you have the cash to pay for something in full, you cannot actually afford it.

You might be wondering how you could ever pay for a car with cash because they can be pretty expensive.

My husband and I recently purchased a car that we paid for with our tax return. Sure, it is a 20 year old car. But it is in great shape with few miles. Those deals are out there! You can’t be an expert money manager if you think the only kind of car you can own is a brand new $25,000 vehicle. Rather, being an expert money manager means you buy the $25,000 car only if you have saved up the money for it.

Related: What to Stop Buying To Pay Off Debt and Save Money Faster

EXPERT MONEY MANAGERS SAVE MONEY

Expert money managers save money for emergencies, to buy expensive things, and for retirement. Let’s break each of these down.

Emergencies

Having an emergency fund is so important in order to stay out of debt.

A couple of weeks ago my husband and I got stranded when our car broke down. I am so glad I had an emergency fund to pull cash from to get the car fixed! This helped us out a lot because we are still trying to get out of debt and didn’t have to backtrack on paying that off by borrowing money (such as using our credit card) to fix the car.

To buy expensive things

Saving money means you don’t have to take out a loan or use your credit card when you want to buy something you can’t afford. Instead, you only buy whatever it is you want once you have saved enough cash for it.

You can have as many different savings accounts – envelopes – piggy banks – whatever method works best for you – as you’d like to save the cash. I don’t think it’s unreasonable to have one for a new car, another for a trip you want to take, and then another for a down payment on a house. You have the freedom to choose!

Now of course if you want one of those items much quicker than the others, you might want to put most or all of your extra money into that particular fund.

Save for Retirement

It makes me really sad when I see people who would love the opportunity to retire and are at the age to do so, but can’t afford to.

To be responsible with your finances means you absolutely must think about your future.

NOW is time to start contributing to your work’s 401k plan if you’re offered one. Don’t miss out on the matching opportunity companies offer with these – it’s free money!

If your company doesn’t offer a 401k plan, talk to them about whether or not they offer any other options.

And regardless of whether or not your company offers some sort of retirement plan, I strongly suggest sitting down with a personal banker to see what options you may have through your bank as well as a financial adviser.

And if nothing else, at least put money into a savings account every pay period that is earmarked for retirement.

EXPERT MONEY MANAGERS TALK TO THEIR SPOUSE ABOUT THEIR FINANCES

Expert money managers discuss their finances with their spouse.

This does not mean that both of you have to sit down every month to create and manage a budget together, but it does mean that you should have weekly, or at the least monthly, discussions around your finances to see how you are doing and if any adjustments need to be made.

In our house, I love to do our budget and pay the bills where activities like that just stress my husband out. But we do talk about our finances now and again so he knows where we are at within our budget.

If you are on two different pages, then you are never going to find the financial freedom you are seeking.

Related: How to Get Your Spouse on Board With Your Financial Plan

EXPERT MONEY MANAGERS INVEST THEIR MONEY

If you’re not investing you’re most likely missing out on earning free money.

My suggestion is to sit down with a financial adviser to discuss different investing options available to you. Many financial advisers have free consultations. It’s worth a visit!

Final Thoughts

These are my top traits of expert money managers. Whether you choose to do all on this list or only a few, remember, you are in control of your financial future. It’s time to take ownership!

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