Barbara Hause, MBA Financial Counselor serves clients nationwide by phone and in person from the San Francisco Bay Area.

Barbara Hause, MBA

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Five Essential Money Tips for Living Happily Ever After

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When you can depend on steady income and credit it’s easy to coast along day to day and not pay attention to the consequences of how today’s spending choices will affect your future goals and dreams.

Coasting along and spending freely can work for quite some time until you get in a bind: can’t pay your taxes, credit cards are maxed or a shortage of cash flow happens which could be caused by a number of reasons (job layoff, illness, economy, life change). Once you start falling behind it is difficult to catch up when you, “continue to do what you have always done, you will get the same results”.

Here are five essential money tips that keep you moving forward for positive results. You will eventually be able to coast again but this time with a solid plan and activities that keeps you conscious and connected to your day-to-day spending choices and your financial goals.

Plan your spending. At the beginnings of each month write down your fixed and anticipated variable expenses. Subtract this amount from you net monthly income. An important part of this planning process is anticipating future needs so a portion of what comes in monthly can be saved for irregular expenses such as property taxes as well as an emergency fund. Without a plan “money will flow freely like a faucet on full blast.”

Be accountable. Having a spending plan does not hold up very well unless you are accountable to it. The plan may look good on paper but until you actually track and compare expenses and income to the plan, it is difficult to know what adjustments need to be made to keep the plan meaningful. If you are a couple, decide who is going to oversee day to day money management which will include tracking expenses and income and paying the bills. The other partner agrees to turn over receipts to help with this process.

Communicate regularly. By following through with tips one and two above you will have a point of reference for money talks. When meeting with your financial planner or accountant or seeking financial advice you will better prepared to ask relevant, pertinent questions. Couples when talking about money with each other should tune out distractions and be good listeners. The outcome from money talks between partners is not necessarily to see eye to eye on everything but to start looking at some compromises that will lead to mutually beneficial goals. Frequency of talks varies among couples but weekly check-ins help when starting out to encourage trust and teamwork.

Eliminate debt. Dealing with debt is an emotional burden. You need to make it a priority to get rid of it as soon as possible. People without debt are much happier. The first step is to find out what is the bottom line on your debt – what do you owe? The next step is look at options for paying it off. The best solution is to come up with a repayment plan that consistently reduces the outstanding balance while at the same time increases your savings so you will never have to rely on credit again.

Prepare for financial challenges. Even with good planning and budgeting all financial challenges can’t be anticipated. You could lose a significant amount of money in an investment for economic reason out of your control or it could take longer than expected to find a new job after a layoff. If you have a good understanding of your finances you will be more prepared to handle any kind of financial challenge that come your way. Your strength will come from having financial clarity and having created an emergency fund to get you through a financial crunch.

These 5 tips are essential to avoiding and solving all money problems; however, there is more to it since money is deeply connected to emotions. If you have tried these or similar tips before and they have not worked you probably gave up too soon. Changing attitudes, habits and beliefs about money takes time and discipline. To get on a faster track for recovery hiring professional help is the way to go. A good financial coach or counselor will provide you with non-judgmental support, structure and accountability. Once you eliminate money problems then all your energy can focus on living happily ever after.