How To Get Better At Managing Money (Quick Money Monday)

I’ve learned a lot about money management in the last year and have improved my skills in the area substantially. Here’s some ideas on how I have gotten better at managing money and how you can too.

0:00 – Introduction
0:31 – 1 Year Ago Today (0:43….add video)
1:10 – I’m not actually ‘broke’
2:06 – #1: Being completely focused on my money and constantly looking at it
3:07- #2: Creating a cash flow calendar
4:25 – #3: Remain as frugal as possible
5:20 – #4: Find ways to achieve more with less
6:25 – #5: Building up cash buffers in my life
8:09 – #6: Working really hard to build up my passive income
10:35 – The biggest thing has been focus
10:52 – Something I really need to work on
11:26 – I’ve come so far in the past year

How I Got Myself Into Debt

Recommended Videos:

Barefoot Investor Bank Accounts Explained

I Need To Get Better At Managing Money (March 2018)

Transcription:

almost exactly one year ago I decided that it was time finally time to get better at money management and I’ve learned a lot over the past year and learn a lot especially over the past couple of months so here I want to talk about how I’m getting better at money management and some of the things that I’ve learned hi i’m ryan from onproperty.com.au/free angel’ freedom and welcome to another quick money Monday where we talk about things around money now it was almost a year ago to the day I’m recording this on the 27th of March it would go out early April but on the 26th of March 2018 I published a video that says I’m working or I’m looking to get better at managing money so I’ll link that up down below or you can go to onproperty.com.au/mortgage 493 to check that out but I really feel like over the past year despite the situation that I’m in now I have learnt a lot about managing money I’ve made some major improvements in my life and I’m so much better at managing money now than I was in the past now if you’ve been following me for some time you’ll know that I’m in debt currently working my way out of debt that I’m saying with family to reduce my expenses but I just kind of want to put the disclaimer out there that I’m not actually broke so yes I have debt to pay off yes I’m currently living with my family to save money but I’ve still actually got a solid passive income in my life that if it wasn’t for the debt in my life I would likely still be financially free or very close to it and I’m actually working on growing my passive income at this point in time as well so money management has been a massive issue in the past as well as obviously things that happened in life if you want to find out how I got into debt then I’ll link up to that down below but yeah so money management has definitely been my issue and you know added to the fact that I got into debt because I didn’t build up my buffer funds and things like that but I’m really working on it so in the book Rich Dad Poor Dad he talks about this idea of minding your own business and basically treating your own life and your own finances as a business and paying attention to it and so the biggest way that I’m getting better and money management especially in the past couple months as I’ve really been focusing on smashing this debt is just being completely focused so really focusing on my money paying close attention to it and constantly looking at it that’s the biggest thing and the issue that I had in the past being financially free or having pseudo financial freedom where you’ve got enough money coming in that you don’t need to worry about expenses we’re going to have it where we just didn’t look at our finances because they tended to be enough money in there to pay for the things that we wanted to pay for so we didn’t watch it closely so now I’m really focused and I’m constantly looking at it and I’m looking at my current position where I am now how much money I have now and I’m also projecting forward so I’ve gone ahead and created a cash flow calendar which I may do a video about in the future as well if you’re interested in hearing about it but a cash flow calendar basically maps out of the year and the payments that I need to make so it looks at monthly payments things that are regular like your phone bill and your internet bill and stuff like that but also things that are more irregular so I’ve got quarterly school fees that I need to pay health insurance was six monthly I’ve now moved that to monthly as well as some of my debt payments come in large chunks and so I need to project forward and look at okay what month do I need to pay X amount in terms of debt and so I’ve basically created a calendar for the entire year so I can see how much money I need to have in each month and then because I run my own business the focus then becomes okay how can I earn enough money each month to have enough in the month that the money is due anybody own an extra in one month that I don’t need then I project that forward and I say okay well this money I’m gonna need in the following month or the month after that and so I’ve really been watching this constantly assessing my current situation as well as projecting forward as to what I need to achieve in order to meet the debt payment plan that I’ve set for myself so because they are looking that’s being really important remaining as frugal as possible has also been really key for me now one way that I’ve been saving money is obviously living with family I’m filming this at the moment in my dad’s garage which is where I’ve set up my office I’ve been living at my dad’s very fortunate in that my mum is going away for a couple of months so I’m going to have her place rent-free when I have the kids over there they’re basically saving money there but also in my own life living much more frugally as well so being much more conscious of the money that I spend and as you guys know I’m working on the fact that I do spend too much money on coffee but that is a work in progress because I have bought beans and started making coffee and buying less coffee so I’m working on becoming more frugal all the time and just being more conscious in my decisions so being more frugal and trying to achieve more with less even in business I wasn’t extremely frugal in that I’d be like oh there’s this new tool out there I know that if I invest in this tool I could make money and you would just kind of add up the subscriptions that you are paying for all the tools that you were buying and so now instead of just buying things I think about okay how can I achieve more with less how can I make do with what I do have so had an issue with my computer being very slow with video anything really struggling in the past it might be like okay I’ll go on gumtree and I’ll buy a used computer but an upgrade probably spend around $1,000 sell my old one for 500 bucks so maybe spend $500 there but I was able to actually solve the problem by getting an extra computer part or some RAM for my computer to speed it up so that cost me $100 and so I’m able to keep the computer that I have which is fine otherwise and so being as frugal as possible trying to achieve more with less trying to not on the business spend money on tools and things that I don’t really need as well as in life as well another thing that I think is really important and that I’m getting better at and I kind of talked about it with my cash flow calendar is building up buffers in my life so one of the reasons I feel I got into debt was that I put myself in this situation where basically I was living on the edge so there’s nothing come coming in to pay my expenses but then when something went wrong when that Black Swan event happened in my life and expenses skyrocketed or you know we had I had a separation last year so that was quite an expensive endeavor to separate be paying for two separate houses we then relocated interstate I didn’t have a buffer fund set up for that so things were set up in that if life kept going on the way that it was going on we would have been fine but life didn’t do that something happened and I had no buffer fun in place to prepare for that so now I’m very much aware of that and building up buffer funds so I’ve quite an aggressive schedule to pay off my debt but if I earn extra rather than just putting that extra onto debt and leaving myself with nothing I definitely have put that money aside because I know it’s going to be paid for debt but it’s a buffer at this point in time until that data needs to be paid so I’m building up that buffer fund as large as possible and then sometimes making a decision to okay I feel comfortable now to take some money from that buffer fund to pay off debt but yeah I’m very conscious of having a buffer in case things go wrong to ensure that I can continue to pay for the things that I need to pay for things like school fees which are very important to me and Kelly to have our kids in Montessori School which we absolutely love that’s something we really value and so having buffer funds that I can always pay my school fees is one of the things and also the last thing is just working really hard to increase my passive income and that’s something I’ve realized kind of sets me apart from other people is that I got in this situation where okay I need to pay off debt what most people would do would be like how can I earn money right now to pay off that debt right now and to minimize that right now but rather than doing that I thought okay what work can I do right now to increase my passive income and so obviously I need to manage the payments that I have and the expenses that I have in my life that’s what the cash flow calendars for but I feel like I can do that and then focus on building up passive income and so for me a lot of the work that I do it’s got a six to twelve month lag before it starts earning income so I’m doing a lot of work today on my business that is not really paying off so despite being in this situation where ideally I would like to have my debt completely paid off today I’m looking 12 months I’m looking 2 years into the future that eventually this that’s going to be gone because I’m getting better at managing money I’m paying it off even with my current income levels I’m paying it off I don’t need extra income to foresee that I will pay this off in the future but what I do want is once that is paid off to be in a better financial position that I was before all of this happened and so to do that I’m working hard to grow and to build up my passive income in my life and so well that’s not making me extra money today and it’s really frustrating to be working so hard and doing really long hours of working long nights and not seeing any fruits of that labor I don’t get paid a paycheck I don’t get paid X amount per hour I do work and I hope that over time that creates passive income which given the strategy that I’m implementing I think will but it’s never guaranteed but yeah I have that delayed gratification which also helps me with my money management as well so I guess being tight now can be stressful and can be anxiety inducing but just keeping that focus on the future and where I want to be at because I’m not broke I will pay this off and I will hopefully be in a better financial position in a year’s time that when we look back in another year on how I am managing money we’re talking about growing wealth and talking about investing in a year’s time versus where I’m at now which is paying off debt so I’m getting better at money management the biggest thing has really just been focusing on it constantly paying attention to it constantly paying attention to where I’m at to the cash flow calendar that I’ve created and the bills that need to come up and then just constantly looking at how I’m spending money and getting better at that something that I really need to work on is looking at exactly where I’m spending money in my discretionary budget so obviously we about coffee but there’s other aspects that I feel like I could do that better and do that more frugally so when I’m cooking meals for the kids there’s probably a way that I could make that same meal maybe slightly different but make it more affordably and so this little aspect of that that I could really improve upon as well to save more money and to have a better life within the limited budget that I’ve given myself while paying off this debt so I’m getting better and managing my money I’ve still got a long way to go it’s a long long road ahead but it’s really exciting to look back on the past year and how far I’ve come like looking back a year ago I didn’t have a budget I didn’t know how to budget I didn’t know how to manage bank accounts I was really struggling with that sort of stuff me and my wife then at the time had tried many different ways to budget and completely failed and now I feel like I have a budget that really works for me that most of my payments are automated I’m getting better living frugal I’m building up a buffer and paying off debt I’m so much further ahead than where I was a year ago despite technically being in a worse networth position than I was a year ago so I’m looking forward to the year ahead if you want to get better at managing money then I recommend the barefoot investor go ahead and check out my video on barefoot invest our bank accounts explained as well as the video that I did last year on how I’m trying to get better at managing money thanks so much for tuning in and until next time stay positive