Here’s how it begins.  You open a checking account.  You’re given a checkbook, a check register and a debit card.  Then you’re sent off into the fast paced world of spending.

For someone that’s not had to manage an intangible object such as money in the bank, keeping track can sometimes seem overwhelming.  If you want to achieve that Master of Household Management title, I’ve got two basic rules to share with you of which I hope you will make a mental note…

“Rule No. 1: Never lose money.  Rule No. 2: Never forget rule #1.” – Warren Buffet

The confusing part about having a checking account is the use of two systems tied to one account – checks and debit card.  Not only do we have to keep track of the checks that we write, but we also have to make sure we write down the ATM withdrawals and debit purchases made.

In a quick rush, we’ll make a purchase or withdrawal and will forget to write it down at that moment or will tell ourselves that we’ll make a note of it later.  Well, later never comes.  We forget all about it and lose track of what we actually have left to spend.  Keeping track is a little easier now because of online banking, but there are ways to work smarter – not harder.

My advice:  Make a note in your check register as soon as a purchase or withdrawal is made.  I know it’s easier said than done, but you’ll be amazed how starting a new habit will improve your flow of life.

Another tip:  The use of the “duplicate checks” feature offered by check printing companies.  I don’t write many checks, but with the few that I do write, I always have the carbon copy of who the check was written to and the amount.

The Balancing Act

I’ve heard many reasons around this task, but I believe it should never be overlooked – reconciling or balancing your bank account.  This is a basic task of comparing your check register to your bank statement for a specific period of time…usually monthly. I know it seems tedious, but there are several benefits:

1. You avoid overdrafting your account.
2. It’s a great way to find any errors made by you or your bank.
3. You can uncover unexpected bank fees.
4. Unauthorized withdrawals or charges are discovered quickly.

So for now, the pros far outweigh the cons to balance your checkbook monthly.  When it’s all said and done, I’d rather walk around with the comfort in knowing that the amount I want to spend is actually in the bank.  No more guessing game!

If you are already doing a great job of keeping track of your purchases/withdrawals, this message can be considered as a reminder to keep up the good work.  If you’re a veteran checking account holder and haven’t been following these principles, I urge you to take a few extra moments to start today.

Yes, I understand that you’ve been doing it this way for years, but I promise you won’t be disappointed trying it this way.  I’ve heard that it takes 21 days to create a new habit.  If you start today, you’ve only got 20 more to go.  We don’t want Mr. Buffett to be disappointed!

So what do you do?

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“Managing your finances in real life – the fun way – is very much like earning gold in a computer role-playing game.  Earning money is play.  Spending money is also play.  If you aren’t having fun, you’re missing the whole point”  -Steve Pavlina.

How far you get, in almost anything, is connected to your ability to balance. 

The problem is that financially we tend to live more within one category.  We’re either great savers, awesome givers, or frivolous spenders.

Within this series, I am introducing consciously having a financial balance with all three.  I believe that this balance can and will lead to financial happiness. Let’s take look at a couple of scenarios.

1. If you are a great saver, do you ever spend money on fun things?
2. If you are an awesome giver, do you give until it hurts and expect a miraculous blessing to pay your bills?
3. If you are a frivolous spender, do you spend you money without thought and don’t have enough to take care of your basic needs?

Balance is defined as an equal distribution of weight.  So to be financially successful, we have to live somewhere in the middle – balanced.  Preparing for our future, helping those in need and enjoying our lives as we live it. 

There are two extremes with spending.  The first is to save and not spend.  The second is to spend and not save.  From the definition above, we can see that they are both out of balance.  To create the balance that we need we must learn to spend money wisely. 

I had to learn the lesson of balance the hard way.  I tend to be more of a goal oriented person.  If there is a challenge,  I step up to the plate and give it all I’ve got.  You may ask, “How is that a bad thing?”  Well, it’s bad when you have tunnel vision.  You’re so focused on the goal that you’re really not having lots of fun during the journey.  Constantly looking forward to the next payday and playing with the payoff numbers creating anxiety.  I had to always remind myself to take this process one day at a time. 

How do we have balance with spending money?

To change the thought process of spending requires a shift in our awareness and behaviors.  At first it will seem a little difficult, but once you start making smart choices financial balance is sure to follow.  We can have (most) anything in life that we want, but it requires planning.  I know we love to live on impulse, but impulse only leads to some form of regret.  I’m sure you can look around your home and see things that you purchased unnecessarily.  Hindsight is always 20/20, right.  It is important that we pay attention to our spending habits and correct them for the future. 

I’d like to share with you a few tips I believe will help us to spend money wisely and prevent the anxiety of spending what we don’t have:

1. Define your wants. There is nothing wrong with wanting to purchase every new item you see.  But you have to be realistic about what you can afford.  Take a step back, examine what you want and determine how this want aligns with your goals.  Is it reasonable at this time?
2. Use the 24 hour rule.  This is the best way to avoid impulse buying.   Urges to purchase..NOW..are going to come.  But they are very temporary and beatable.  The urge can usually last for a few minutes to a few hours.  You just have to stay calm, sleep on it and it will probably go away.  If not,  continue to step 3 to prepare for the purchase. 
3. Shop and compare prices.  The internet and telephone are powerful resources for comparison shopping.  If you’re going to purchase the item you would like to get the best deal possible, right.
4. Fit Your Budget.  Determine how much you can realistically save monthly, along with achieving your other financial goals (saving and giving), to purchase this product.    This will ensure that your are really prepared to make this purchase without hardship. 
5. Negotiate. Is the product negotiable?  You don’t know unless you ask.  Be reasonable and find the optimum win-win situation for you and the other party.

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If you aren’t where you want to be financially, you have a few options.  You can continue on your same path, try to make changes somehow, or just give up.  The choice is yours. 

Happy Thanksgiving everyone!!!  I wish you all the best as you take time to spend with your families on tomorrow, Enjoy!!!

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