Money management is an area most people struggle with. Management is in essence administration or the use of limited resources combined with forecasting, planning, leadership, and execution skills to achieve predetermined specific goals. I had to throw in that definition so that you get the hang of what money management is then. As you can see there is a lot that is involved in managing and managing money for that matter. We still have a long way to go in 2022 and now is a great time to discuss money management methods you can try this year.
Piggy Banks
The age-old method of piggy banks can still be used in this day and age. The idea is to get one that is not easy to open. That will have a priming effect on your psychological state of being. Chances are high that whilst trying to open it prematurely, you might give up opening it. People might ridicule you but you will be amazed at how much you can save. This method will largely depend on the nature and frequency of your income. For those who realize income daily, this method is gold! I recall some time back I knew of a lady who ran a boutique. She would ensure she placed US$10 into her piggy bank daily. By the end of the year, she would be having about US$2880. So this is one method you must try out this year – piggy banks.
Enveloping
This one is akin to budgeting; it boils down to your interpretation and execution approach. This reminds me of tithing and offerings at church. I have always used this method to ensure I do not redirect money meant for those two. What I do is I place my tithe in an envelope and I seal it. Psychologically, sealing it primes my mind to fight the urge to open it. The truth is it comes down to how disciplined you are though. Anyways, you can use this approach generally in managing your finances. It is effective for handling cash. When you get your income you simply work through your budget and envelope the respective individual allocations. It sounds simple but if you cultivate using this method it works.
Money Clubs
This is yet another popular one that many still use. Word of caution though: deal with people who are honourable and trustworthy. Many people have been short-changed by other individuals who would not honour their word. There is a dual approach to money clubs that I recommend. The strategy is to have two contributions members make namely, monthly subs and monthly contributions for groceries. Bear in mind that doing it monthly is just one way; you can do it even daily, weekly, or fortnightly. The subs money can then be used for peer to peer lending so that it reproduces itself. Exercise discretion though so that you do not suffer losses. Then the grocery contributions go towards purchasing groceries; starting with non-perishables which you can buy whenever they get cheap. This can even be done way before the end of the year or end period you would have agreed on. There are of course several other approaches based on tweaks to the usual.
Accountability Partners
Accountability partners can come in all sorts of forms. For example, it can be your spouse, your employer, your friend, and so on. This is someone who will keep you in line as far as your money management is concerned. Thus you find that you can buttress the piggy bank method by having an accountability partner. It can also work as well for the enveloping method. It has to be someone who can be objective and tough on you if needs be. If it is your employer and where applicable, you can request them to send certain parts of your salary elsewhere.
For example, let us suppose you have monthly subs to make to your money club. Instead of receiving your salary first (which is a risk), you can have your employer send it right away where it ought to go. I am just giving you some examples to paint the picture of what an accountability partner can do. Imagine if your accountability partner is the one who keeps your piggy bank and ensures you contribute as you should. Chances are you will be kept in line always. However, as is the case with all money issues you must exercise caution and discretion. Deal with trustworthy people.
Do not forget our definition of management. It carries instructive elements that will make these methods easier to handle. You have to plan and forecast – this gives you focus. You must exercise leadership and execution skills – without these, plans and forecasts will be empty. The other element is goal setting – you cannot just use or save your money anyhow. You must have predetermined goals that are specific. The earlier you start the better. Let this be a year with a difference; manage your money wisely!
