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