top of page

How to Manage Your Money: 5 quick tips to get started

Updated: May 29, 2019

Great money management all starts with a basic knowledge and a specific process to stay on top of everything. Here are 5 actions you can immediately take to become great at managing your money:

Educate yourself - Managing your finances is not rocket science. It may be painful to think about, but it can actually be very simple. Make a decision to become more organized and interested in where your money goes each month. You can do it! The easiest way to start is by trying to make it somewhat enjoyable. Set goals, track specific categories, make it into a contest with your spouse or friends. Sticking your head in the sand is obviously not a good process...yet surprisingly common. Start small and build your knowledge base one topic at a time. The fact that you are reading this makes you a rockstar in my book.

Lay it all out on the table - Take twenty minutes and get your entire financial picture down on a single sheet of paper. Break the paper into four sections. Top left is everything you own that has value - “Assets” (bank accounts, retirement accounts, house, car). The top right section is all the outstanding loan balances you currently owe - “Liabilities” (Student loan, mortgage, car loan, credit card balance). The difference between these two numbers is your “Net Worth”. Hopefully, that number is positive. In the bottom left section list your monthly income sources. Finally, in the bottom right section list all of your monthly expenses. The monthly expenses are the hardest part but just do the best you can for now. Hopefully, your monthly income is more than your monthly expenses. Completing this one exercise is a big first step in the right direction. Check out the Cash Flow and Net Worth videos under the “First Steps” section of this website for a step by step tutorial. Meanwhile, here is a quick visual of what I am describing.

EXAMPLE - My Financial Snapshot

3. Track everything without having to do anything - Once you have everything down on paper it is time to take it a step further. You need to be able to track your net worth and see exactly where your money is going each month without manually writing it down. Sites like and personal capital make this possible and do all the heavy lifting for you. By connecting all of your financial institutions to mint, account values are automatically updated and every transaction is pulled into your site and categorized into different expenses. This creates an instant snapshot of your entire financial picture. This view shows a budget, net worth statement, most recent spending, investment portfolio values and so much more. I could not imagine life without it. The initial setup could be tedious and you will have to make sure transactions are categorized correctly, but once it is complete all the values update automatically. Believe me, it is worth the initial time investment to get up and running.

4. Set a specific short-term goal - Get a quick win. If you have a bunch of credit cards out there with balances start attacking them. Set a goal to pay off the lowest balance as fast as possible, then cut it up and move on to the next one. If you have no emergency cash in the bank open an online savings account and start sending a small amount over automatically every month. Just take the first step and then pat yourself on the back. Things will not change unless you change first.

5. Talk more about money - Instead of worrying about money start setting goals around money. See what others are doing. Get second opinions about how you are handling the day to day management of your finances. Have open discussions with family, friends colleagues and whoever else is willing to share. Just remember most people are not good at managing money, so while it is good to listen and share just be careful about what advice you follow through with. Do your own research.

So there you have it. Five ways you to start building your personal finance IQ. Like with any big task just break it down and start small. Before you know it you will know exactly where you stand and what you need to do to live a more secure financial life.

To becoming great with money....

Rich McCormack, CFP®

School of Personal Finance


bottom of page