Managing your own money matters can be a big affair. Most people have to earn for themselves, invest, pay bills, etc. When it comes to managing personal finance we usually take it in our stride.
It’s a good business to offer services of this kind at a fee. The business tasks can be categorized into three distinctive roles. The roles for a Money Management Executive can split into money leader, money manager, and money handler.
The Money Leader Role
Here is the lead role. Providing leadership, purpose, vision, strategy and goals for money operations. The role is of business chief executive officer. You can compare the role of a money leader to managing a successful trip in your favourite car. The money leader decides where to go, the stops along the route, even when to start the journey. All these things are decided by him. A money leader’s task includes having a vision for the finance vehicle, developing financial strategy for achieving goals, setting goals for the strategy, and providing guidance and direction to the other two, the Money Manager and Money Handler.
The Money Manager Role
He helps develop the financial plans and ensures their execution. He has a narrow role to play when compared with the Money Leader. He details the plans of the route the finance vehicle will take. He has the job of monitoring the vehicle all along the way. The money manger will be thinking of taking the highway or another route where he can avoid traffic. The car maintenance, running fuel, and such matters which ensure the car a smooth trip, concern him.
The money manager’s tasks include finding ways and means to achieve goals, for example investment ideas, execution of investment plan, and guiding, monitoring and assessing these plans. The money manger tries to improve the efficiency of the finance vehicle with his skill and drives.
The Money Handler Role:
When it is money matters, the last role is what everyone is capable of doing without prior knowledge or skill. That is the role of Money Handler.
This role is easy to assume. You can write checks, pay bails, make investments. The small little things that you ought to do to keep your finance vehicle running. The tasks include paying bills, writing checks and addressing them to the concerned persons. For investments, there’s documenting paper work or making e-transfers, mobilizing money on pay days, and reconciling accounts, savings and others.
The three roles of the Money Management Executive in personal finance have been detailed here, and this will be of help to those still unaware of it.
Mismanagement of money
If you do not fit into any of the above it is likely that you fall under the category of someone who cannot manage their money. This group of people often rely on loans and credit cards to see them through the month. Lenders of bad credit cash advances often target this group of people with what will most likely be their only option for finance.
If you fall into this non-category it is crucial that you draw up a financial plan and start to manage your money more effectively.
Steps in creating a money management plan
- Make sure that you check your spending each day, say for a period of 30 days. You need to itemize the monthly bills including mortgages and utilities. In fact, you incur these expenditures on a permanent basis.
- Take a note of your credit card balance and payments. Enter expenses on food, leisure, parking fees, personal care, gasoline and miscellaneous expenses. It is important that you list every expense.
- You need to document the entire assets owned by you. Make sure that you maintain a running list of investments, equity in home, savings account amounts and so on.
- It is also wise to track your household expenditure. Money management plan will become successful if and only if you include every financial aspect. Ask your spouse to maintain an expense diary to monitor the personal expenses incurred.
- You need to create a budget as well. There is no point in writing your expenses alone. As you know, limit your expenses if it goes beyond your income. In fact, budgeting at regular intervals helps you know your financial strength and self-sufficiency.
- Make sure that when you prepare the income and expenditure statement, you get adequate balance to meet your debt needs. It is not just about the maths in the record, you also need to possess the physical cash or equivalent asset shown in the income and expenditure book.
- Ensure that you pay off the debts in the first place. Try not to bilk debts, as it brings only severe financial woes. It is wise to make payments on your bills within the stipulated date.
Finally, yet importantly, take care that you cut down your spending and increase your savings. In fact, the prime motive of personal money management is to bring in financial stability by raising the amount of assets owned by you.