Banks, Budgets and Balance – Are You in Charge of Your Cash?
I was a little alarmed recently when a friend of mine said she had no idea how much money she had in her bank account. We’d been talking about how much we were spending in the lead up to Christmas. What part of the bank account was available for spending on fun things; that part that had not already been allocated to rent, school fees, insurance, car, household, and so on. Unfortunately, it’s not uncommon for women to abdicate when it comes to managing their money. And I think it’s time to sort it out. I’ll say this first: Women who lack transparency over their income and expenditure are not stupid. Like most ladies, these are strong capable females who for one reason or another believe it’s easier to just let someone else handle their personal finances or have partners who readily take on that role and do it well.
Maybe they’re afraid of how much they’ve spent and want to avoid any feelings of guilt (not that they should necessarily have any). So, they choose not to analyse every entry on their credit card bill.
Maybe it’s just one more thing that they just don’t have time for - getting to grips with all those apps and login details and navigating online worlds in an already hectically connected life.
Maybe they’ve grown up to believe that financial decisions are best left to their partners and they are quite happy being able to look after all the household spending.
Maybe it’s the thought that your partner and you are both young, in the prime of your money-making years and saving for retirement is a long way off.
Whatever the reason, I have learnt with opening a business that having oversight of your bank accounts, debt, income and expenditure is vital to your independence, and not something to relinquish lightly. This is not meant to suggest that you are to do it alone. But in assuming it’s all too hard / don’t want to know / someone else takes care of it, we do ourselves a disservice. Because how can you take control of any aspect of your life properly without knowing the value of things and your position in relation to them. Having a grip on your finances empowers you to make decisions and to make them confidently and decisively. The positive headspace that puts you in worth its weight in gold and flows to all areas of your life.
So just in case anyone out there is reading this and is struggling (or burying their head in the sand), here are some simple tips to nudge you to get started
- Download: make sure you’ve got all the relevant banking and budget apps saved to your phone. A good one to check out is the YNAB (You need a budget app)
- Demystify: learn the lingo and discover how straightforward your money management can be. There are thousands of books out there but….. snore!!! Try a podcast instead, like Mo’ Money.
- Discuss: talk to your partner, join a Facebook Group, or find an independent financial planner to understand your position and set some goals for your budget and savings.
- Divvy Up: think about dividing your income into different buckets and drawing on the relevant buckets when it comes time to paying bills or paying yourself (if you’re self-employed). Having all your money in the one bucket can make it challenging to psychologically shift your money management habits.
- Deliver: Start sticking to your guns. The satisfaction you’ll feel in resisting a purchase if it exceeds the budget you allocated starts to pay off eventually and can even become quite addictive. Controlling your money instead of it controlling you is a much more comfortable position to be in.
Being aware of our financial position shouldn’t fill us with dread. In most cases, the not knowing is worse than the reality. Even if you are in a fortunate position not to have to worry about money, putting yourself in charge of it means you can do so much more with it.