What Does It Mean to Be Good With Money?

Oftentimes, I’ve heard people say, “I’m just not good with money.”

But what does it really mean to be good with money?

Does it mean that you enjoy entering numbers and calculations into an excel spreadsheet? Or that you pay all your bills on time and you’ve managed to build an emergency fund?
How about regularly investing in a retirement account? Does that make you good with money?
Personally, I do all the above. But I would not consider myself to be good with money.

However, I would say that I have a good plan and management systems in place, that allow me to make progress in accomplishing my financial goals.

So, what is a good money management plan?
Well, it depends.

You see, due to varying circumstances (e.g. income, financial obligations, beliefs, etc.), what works well for me may go horribly wrong for you, and vice versa. My systems include tracking all our income and expenses in an excel spreadsheet. This may seem tedious and outdated to some, but it’s a good fit for me.

Also, I have funds automatically withdrawn from each of my checks and deposited into emergency savings, sinking funds, and retirement accounts. Automated deposits play a major role in building our savings and investments because it removes the dependency on me from the process. Prior to utilizing automation, good intentions did not always lead to actions on my part.

Assuming you have a sufficient income, the following steps can help you create an individualized plan to effectively manage your finances:

Fix your words – Change those negatives to positives. Instead of throwing your hands up in defeat and saying, “I’m just not good with money.” Say, “I’m taking the necessary steps to improve my financial situation.” And follow through.

Decide what you want – Do you want to buy a house? Do you want to pay off debt? Do you want to save and invest? Do you want to travel? Write down the things/lifestyle that you desire to achieve. To determine the best route to take, you must first figure out your destination.

Identify obstacles – Recently, we reduced our monthly expenses by contacting providers and inquiring about ways to lower our bill. Additionally, we canceled services that we were no longer using. What’s standing in the way of you accomplishing your goals? Pinpoint your roadblocks and take the necessary steps to remove or mitigate them.

Explore options – Reach out to friends or family members that have their finances in order and ask them for tips. Also, there are plenty of blogs, books, YouTube videos, and podcasts that provide information on budgeting techniques, savings, investing, taxes, etc. Not to say that everything you hear and see will be right for you, but you can decide what is useful and disregard the rest.

You may even opt to meet with a financial advisor for assistance. Some financial advisors are paid by charging a fee-only and others are paid based on commissions for selling certain investment products. If you choose to work with a financial professional do your research and find out up front how they are being compensated. You want to work with someone who has your best interest in mind; and not just a salesperson.

Set aside time today to focus on devising your plan.

Start by analyzing your beliefs and relationship with money. Then work toward reshaping any idea, by which you are being guided, that does not serve you. For example, if you loan money to others at the expense of not being able to pay your bills on time. Or, if you refuse to discuss finances with your significant other because you grew up in a home in which money was a topic of contention. These types of behaviors are counterproductive to your financial well-being.

Map out where you are, where you want to be, and what you are going to do to get there!

Be confident in your ability to develop and commit to a process that works for you. And once you have created your plan, be sure to track your progress and make adjustments as needed.

“If you always do what you’ve always done, you’ll always get what you’ve always got.”
~Henry Ford