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Steps to More Effective Money Management
Managing Stress by Managing your Money
Sometimes when people are
under stress, they hate to think,
and it's the time when they most
need to think.
~Bill Clinton
Financial stress is one of the leading causes of stress in Americans.
Stress is linked to health problems:Unhealthy coping behaviors which leads to
more stress. Ex. Smoking, drinking, overeating.
Less money for health care.Loss of sleep.Depression.
Stress and Money Management
You can reduce your financial stress by learning how to manage your money more effectively.
Do you manage your money so you can pay for your needs and wants?
Answer the following questions with either a YES, SOMETIMES, or a NO.
Yes = 3 pointsSometimes = 2 points
No = 1 point
How Do You Manage Your Money?
1. I pay the rent or mortgage payment and utility bills when they are due.
2. I plan ahead for big expenses. Ex. Insurance premiums, buying another car, etc.
3. I have a plan for how take-home pay will be spent.
4. I save 10 percent of my take-home pay.5. I keep receipts, check stubs, etc. as records
of payment and to use when figuring income tax.
Quiz Time!
6. I get interest rates from different lenders; credit unions, banks, etc; before deciding where to borrow money.
7. I compare prices at two or more stores before deciding to buy expensive clothes, furnishings, etc.
8. I have insurance to cover debts I owe, funeral and burial costs, and injury I might cause others.
9. I spend no more than 15 percent of my take-home pay on installment payments (not mortgage payments).
Quiz Time!
22-27 points – you are trying to manage your
money and probably have control over your
financial situation.
13-21 points – you need to improve your money
management practices.
7-12 points – you need to increase your
knowledge and skills if you want to improve
your money managing skills.
How Did You Score?
The first thing to do to get your
money working for you is to know
how you want it to work.
Decide what is important to
you—now, 5 years from now,
and later.
Set realistic goals
What Now?
Spend money on your needs FIRST!
Basic needs include: basic food, basic
clothing, basic shelter, basic transportation,
taxes, insurance, and savings.
Needs and Wants Are NOT the Same Thing!
Know what money comes in
You can only spend what you take home,
if you spend more you’re going into
debt!
Know the Flow
Know what money goes out
List all payments you make each month.
Track what you actually spend on food,
recreation, and other items for a week.
Multiply this number by 4 to get a
monthly total.
Create a spending plan. This will help you:
Stay out of debt
Avoid impulse spending
Save money for long-term
goals
Identify areas for potential savings
Establish financial control and direction
Final Steps
Pay Yourself First
Put at least 10% of
take-home pay into
savings.
Savings can be a
life raft in
emergencies like
accidents, illness,
or unemployment.
It’s recommended
to have 3 to 6
months of expenses
in savings.
Final Steps
All the Steps
Set Goals
Needs vs.
Wants
Know what
comes in
Know what goes out
Spending Plan
Pay Yours
elf First
http://www.wellnessproposals.com/financial-fitness/financial-wellness-handouts/money-management-to-get-what-you-want.pdf
http://www.quotegarden.com/money.html
http://www.youngmoney.com/credit_debt/money_management/budgeting/020809_06/
http://stress.about.com/od/financialstress/a/financialstress.htm
Sources