How to Manage Your Money Like a Boss
How to Manage Your Money Like a Boss
Go ahead and kick your feet up on your desk and enjoy your coffee, you’ve earned it, Boss. Wait, you’re telling me you’re not a boss? You don’t manage anyone or anything? You’re not the El Jeffe, Queen Bee, or Head Honcho of your office? Well, neither am I. Nobody is taking me out to Applebee’s for an office lunch today or buying me a frosted “World’s Best Boss” cookie cake. I may not manage people, but I manage my money. Here’s how you can manage your money too – like a boss
Have Plans, Not Just Dreams
Can’t help it, I’m a sucker for a good quote. “It takes as much energy to wish as it does to plan”. Amen to that. You don’t just dream of buying a home, paying off your student loans early, getting that promotion you want, or retiring early. You don’t dream about it because you actively plan for it. You’ve got goals, you’ve got plans, and you manage your money accordingly. Set your goal and create a step-by-step, weekly, monthly, and yearly plan and make it happen.
Nobody likes a micromanager, especially your money. Know where you put your money and then have the peace of mind that it’s doing what you told it to do. Set-up automatic payments, spending alerts, and have statements e-mailed to you for review. Just like a good leader, when you don’t micromanage, it frees up time for you. Spend this new found time focusing on how to better manage your money strategy and tightening up your goals.
Focus on Small Wins
Rome wasn’t built in a day and your mortgage isn’t going to get paid off overnight either. Big financial goals take time, planning, and dedication. The first time I took out a 30 year mortgage, it sickened me to think about how much I was going to pay in interest. Not to mention, I’d be 30 years older when I finally paid it all off. Sigh. Instead, I focused on trying to make additional principal payments when possible and keeping my eyes peeled for the best re-financing offers. Now, 11 years into our first 30-year mortgage our house is paid off. It didn’t happen overnight. It happened when I finally got serious and created a plan with a milestone on how we could pay off our mortgage early. If you could manage your money better, what could you accomplish?
Know Your P&L
Like any successful manager, you understand your Profit & Loss report (P&L). A P&L is a high-level report that shows a manger in general terms their bottom line. It’s revenue minus expenses and hopefully, it nets to a profit, not a loss. Just like a manager, every month you should know how much money you’re bringing in, what you’re spending it on, what you have leftover, and then finally, what you do with the (hopefully) profit. Give every dollar a place in your budget whether it’s for savings, investments, or expenses.
Know Who Your Money Works For
Does your money work for you, or does it work for your banks, lenders, and brokers? It will be a cold day in hell before I pay an ATM fee, credit card fee, or interest on my credit card. That’s just silly. Why give your money away to someone when you don’t have to? I’ve done my homework on where I can find the lowest expense ratios or commissions where we can invest our money. Your money should always be working for you first.
Don’t Pretend to Know It All
Have you ever heard “fake it till you make it”? As a money boss, I don’t play that game. When I don’t understand something financially, I don’t just ignore it and pretend I understand it. I seek the answer myself either by doing my own research, asking a smartypants military finance blogger friend, or finding professional help. You don’t have to be an expert at everything. Next time you’re buying a new house or car, trying to figure out your TSP or doing your taxes if you don’t understand something, ask for help. If I’m going to sign my name to something and spend my money on it, I want to 100% understand what I’m doing.
Stay Cool under Pressure
Bad stuff happens and sometimes you just can’t prevent it or foresee it. However, like a good money boss, you know how to be prepared for them. You have your most valuable assets insured – you and your family. Whether it’s medical or life insurance, you should know how much coverage you need and you don’t let it lapse. The same goes for your tangible assets. Home, auto, rental, whatever you need, you maintain the coverage you need to protect your assets. Likewise, you keep up a plump emergency fund for unexpected costs that hit your budget. Spending out of your emergency fund is never fun, but at least you’re covered and you don’t have to financially sweat it when something terrible goes down.
Are you already managing your moolah like a boss? Or do you have some financial personal development to do?