How To Manage your Cash 101

Ok. Let's cut all the pleasantries and get down to the reason for this article. I'm not rich. Not yet. Not even close. I may not be the best person to tell you how to manage your cash. I'm not an expert. But I've seen people do it in the ‘baddest’ of ways. Trust me; you don’t want to go on that same path.

Well, I'm not promising anything but I hope you'll learn a thing or two. I don't earn the worse salary but of cause, it can be better. I've been flat broke a number of times. No one likes to be broke yet we all do. And it’s all because of how we manage our cash. How much you earn will never make you rich. Its how much you retain that could potentially lead you to richness.

Different folks have said different things about money. Some I agree with. Some I don’t. Unless you're Bill Gates or Jay Z or the Queen or have multiple streams of income, money is nothing anyone has enough and will ever have enough of. Unfortunately, that applies to you and me and about 99.9% of all the folks who will read this piece. At least that’s what my knowledge of economics tells me. I think they call that scarcity.

What I’m about to share with you won't make you filthy rich. It won't make rich either like I said. You're wasting your time if that's what you expect. You'll be better off watching TV. However, if all you want is how to practically manage your cash, then you're welcome. Continue reading! :-)

Let's begin.

Discipline is everything. It's never easy to manage cash. Yes. Truth be told. Especially when you need to cut back on certain expenses. We all wish we're handed a blank cheque at the end of the month. Even your boss wants that too. Our wants are endless. The means to satisfy those wants are acutely limited.Your salary will never be enough anyway. Hence your only option is prudent management. To begin with, you must recognize that you are mismanaging your cash and that your situation could be better. You must see the need to properly manage your cash and resolve to do that. Recognition of the problem is of extreme importance because it will subsequently become the driving force behind the much needed discipline. Not recognizing the problem to be resolved is like a teacher walking into a classroom and says to his students: Start work! I'm sure you'll think he's nuts. Indeed, problem recognition is the greatest motivator.

Now that we're motivated to make changes, we can continue. The experts will tell you to identify your priorities and draw a budget. I agree with them perfectly. You’re the best person to know the important things you spend your cash on. I can only speculate. But yes, you absolutely need to write them down and assign rough estimates to them. This will give you an idea how much provision to make for those expenses.

In as much as I agree with the experts about drawing a budget, it never works for me. I've tried it on many occasions and I always end up over spending my budget. I sometimes forget I even have a budget. I may have lacked the discipline it takes to draw and maintain a budget. If a budget didn't work for you either, welcome to the club.

It’s very frustrating when your efforts don’t yield the expected results. There are times that, just two weeks into the new month, I get broke and looking forward to the next pay day. Interestingly, I usually have no idea what I spend my money on. Some people have worse experiences. All of my experiences reinforced my resolve to remain disciplined. My frustrations however led me to discover some radical tools and since then, I’ve never looked back.

It’s never advisable to save money. Yes! You read right. Don’t save. Invest instead. The two are never the same. One keeps your money. The other makes your money work for you. In recent times, some banks try to lure clients into saving with them by offering them some paltry amounts on their monies. They call it interest.  Don’t be deceived by it. Always remember, the reason why you may be over spending is because you have easy access to your money. The harder it is for you to access your cash, the less likely you are to spend.  Investment of your cash is one of the best ways to manage it. So don’t save, just invest.

There are several investment vehicles you can consider depending your risk level and your expectations. Just walk to any investment house and ask about their products and buy into the one that suits your needs. The investment firm I use is NTHC Ltd. This is because they have three strong state institutions as shareholders. I know my money is safe with them.It’s very important you find a place to invest. From that point onwards, you have to treat investment as an expense. A special expense that pays you back.

Standing orders and post dated cheques are crucial tools that we’ll use to ensure we don’t  spend more than we estimated. This is very important. Research shows that, the more we have at our disposal, the more we spend. Hence, the dates for the standing order and post dated cheques should coincide with our pay day. Standing orders don’t really work for me. The bank may not execute the order or do it at the wrong time which could affect me harshly. One of the reasons why I chose NTHC is the flexibility they give me. I issue post dated cheuqes and they present them on time. I’m able to talk about NTHC this way because I have used and still use their service. However, if your choice of investment firm provides this convenience and flexibility, use it. It’s a life saver.

When you put these processes in place, all you have to do next is watch and wait. You’ll need loads of patience and discipline. Initially, it will be tough and slow. It might even not make sense at some points. But I can assure you of one thing. If you remain steadfast and resolute in your determination to prudently manage your cash, you will never regret you did.

Nothing good comes easy anyway. Unless you do something different, nothing different will happen. If you genuinely believe your cash management is poor, I can guarantee you that this piece will significantly transform your situation.

Always remember this quote: "If you don't like something, change it. If you can't change it, change your attitude".