I started using a personal finance management tool

Updated: Mar 24, 2019

Creating and tracking your budget

In the modern America , where contracted jobs make up more and more of the workforce, having a good handle on your finances is as critical to professional success as it is to personal financial stability.

The Hard Part

“Live a life like no other, so you can live a life like no other " - Paraphrased from Dave Ramsey's radio show

A recent article outlined that most Americans could not handle a $1000 emergency without going into debt.

This news shocked me , but didn't surprise me. For years I lived check to check and without any real idea of when that would change. Somewhere along the way however I started to actually challenge what I had been doing with my finances ( which was almost nothing) and started to budget. A strange thing happened almost immediately, I started to notice where my money was being spent, and how much of it was not going to things that were long term. By long term I mean that there literally nothing to show for what the money had been spent on. Worst of all I was still paying down student loans and had just about no money invested in my future outside the company 401K i was forced to participate in.

That's right.. I was just like most Americans only a few short years ago. That was around the time i was introduced to several books on personal finance and they forever changed the way I look at my role in my future planning. I learned very quickly that if something can go wrong it will go wrong and for that reason alone an emergency fund is needed.

Next I learned that reducing debt has the same effect as giving yourself a raise. You simply have more money that can go to you. .

Stop saying "I got this" - You don't!

“Be confident in your abilities, Be proud of reaching your milestones, but don't think what you have always done in the past will work in the future. ” - Trader Dre

When you are getting started you often do what most people do which is to keep track of things in your head. You make genarl trigger points that you hold to as indicators for when you should take action, and for years that worked. So what happenned? how did things start to get away from you?

The answer is often not as simple as I spent too much or I don't make enough. It often comes down to "things got complicated" and I don't know what to do.

This is where starting to use programs such as Mint, Quicken or even Excel can change your life. The best part is most software these days allows you to connect account via the cloud and make the transistion fairly painless.

Choose a method or software you think best suits your needs

I have used Mint and Quicken in the past and despite it being free I had a better experience with Mint as it offers a lot more cloud-based connectivity, even though made by the same company. There are a myriad of other software choices out there and many are completely free to use ( with the caveat that a financial planner may call you). The key things that are important in whatever program you choose be it excel, or an automated program, is that it should have a way of looking at past spending and a way to break out both fixed cost and variable cost. That way you can make a realistic budget based on what you actually spend each month. Once you can see the spending and compare it to the budget you need to hold to it will became apparent where cuts or reallocations need to be made.

The Easy Part: Get Inspired To Make Changes

The best thing you can do is to identify where things are not going to plan and start making changes to your behavior to correct the problem. There will always be things that pop up but keeping some discipline early can help you to build on the many other aspect of you financial goals while still living a comfortable lifestyle. If the task is too complicated seek out help from a professional. There is nothing wrong with outsourcing a skill set you don't possess, and as long as it helps advance your overall planning, saving, and investing goals then it is a win. Good luck!

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