Manage Money; Don't Let it Manage You

By Elizabeth Schulman

I'll admit that I am no expert on money management. I am, however, an expert on making some unwise choices that have led to money problems. Like so many others, I didn't see the problems coming until they were already there and, once they were there, they were very difficult to get rid of. During my journey to get back on track I learned some valuable lessons about managing money problems. My experience has given me my "expertise." My experience has also yielded some pretty good advice. It is as follows:

First of all, GET ORGANIZED! It is vital to know what debt you have, what your expenses are, and what budget you can work with. Until you take a full inventory of all of your assets -- as well as your debts -- you can't fix anything. Take a full month to record all incoming bills, your income, your expenditures and anything else you spend money on. Even record your morning cup of coffee. Everything counts for this first month. Once you have recorded everything for one month, create a realistic budget for yourself. Above all else, stick to this budget, at least until you have a better comfort level with where you are financially.

PUT YOUR CREDIT CARDS AWAY! I put this in capital letters because credit cards are evil little things. They lure you into a false sense of security that you can have whatever you want and can pay it off at your leisure. However, that outfit you "have to have" isn't so fantastic when you are still paying it off five years later. If you are really in the hole with your credit cards, there are fantastic, not-for-profit credit management companies out there that can help you consolidate your debt and pay it off faster. Assess whether you have the discipline to do it on your own or if you need help and then commit.

Since you will have no credit cards available to you (yes, see above), pay cash for everything. A good rule of thumb is that if you can't afford to pay cash for it, you can't afford it- period.

Downsize where you can. Take a look at the budget you have created and see where you can make cuts in your lifestyle. If lunch costs you $5 per day at your office cafeteria, see if you can bring your lunch instead. You'll save $25 a week -- that's $1300 a year! Or decide whether you really need 75 cable channels or if basic cable will do. Once you take a good look at your lifestyle and where you spend money, I guarantee you'll be able to downsize somewhat without major trauma to your quality of life.

Find yourself better deals. Negotiate with your creditors to see if you can get better interest rates on your credit cards. Shop at outlets and buy generic. Go to the library to take out books, movies, and music instead of buying them. See if you can split magazine subscriptions with friends instead of purchasing them all yourself. There are so many ways to pay less for the same things, but you must be proactive in looking for the better deal.

Finally, take one day at a time. It takes very little time to get into financial straits and a lot more time to get out. Continue to focus on other things so you don't become obsessed with your finances. Financial success means something different to everyone. Being "rich" is not necessarily the goal. Life is full of pleasures that have nothing to do with what you own or what you can purchase. Focusing on what you do have helps put things into perspective. Commit yourself to these items and you will eventually be able to enjoy financial stability again. Patience is 90 per cent of the battle!

Elizabeth Schulman, M.A. has a masters degree in stress management from Goddard College and a masters in health education from Columbia University. She is a yoga instructor and a full-time mother.