Money Management for the New Millennium: Four Reasons Why Managing Money Today Is So Hard and What You Can Do about It

Have you ever wondered why managing your money seems so hard? Not only is it challenging knowing which method will work, but more significantly, the real issue is determining which method will bring a long-term, sustainable, satisfying lifestyle change.

You would think, with the abundance of available information, that it would be a no-brainer to effectively manage your personal finances. So what gives? Why is it so hard to manage money? Could it be related to the current pace of your life?

Think about the following modern obstacles and consider how they may apply in your life.

Choice Overload

Would you like boiled ham, or Italian ham? American cheese, or Provolone? Wheat, or white bread? Should you pay off your debt, or put more money into savings? Buy a no load or load mutual fund?

Believe it or not, there actually was a time when choices were limited to things like ham and cheese, silver or black eyeglass frames, vanilla, chocolate, or Neapolitan ice cream, one long distance carrier, 30-year mortgages, and paying either with cash or check. Where in your life right now do you have the simplicity of two choices?

Even though these many options are designed to make you happier, this ongoing daily accumulation of the most mundane choices eventually causes such “overwhelm” that there is little energy left for the more important financial decisions. Have you ever been so overwhelmed that you just picked anything to get the decision over with? And if so, what did this decision cost you in terms of money, disappointment, frustration, or time?

Lifestyle Overload

Can you think of the last time you had an evening or weekend when you had nothing to do? If you are like many, your life is probably crammed with family, work, and community obligations. So just when do you squeeze in the time to pay bills, research major financial decisions, compare prices, record and evaluate your spending, prioritize your financial needs, or take time to discuss financial matters with your spouse and family? Many times, the expensive late fees and bounced check fees are not about lack of money or money skills but instead are due to a lack of time to pay the bills, deposit the paychecks, or get financially organized.

Media Overload

Would your 12 year old really care as much about shopping at Victoria’s Secret if she wasn’t reading teen magazines and wanting to dress like Britney Spears? Would you still have bought that Dell computer if you weren’t told 100 times you “gotta have a Dell”?

It’s hard to maintain a simple, manageable life with the daily bombardment from TV sitcoms, commercials, celebrities, movies, computer games, Web sites, and magazines influencing spending in every facet of our lives. To feel trendy, we notice how to dress, style our hair, feed our pets, furnish our homes, travel, play, and invest our money.

The cost of this media overload can be financial as well as emotional. Even if you are able to “keep up with the Joneses,” are you able to keep up with the payments? Notice how much energy goes into putting on the brakes for your children or for yourself every time you are in the mall and see something you just have to have. After all, how can you pass up that tempting, convenient, fabulous product for yourself, child, home, vehicle, or pet? Yet if you weren’t aware of this product, you probably would not even feel like you were “missing out” if you didn’t have it. Also, your monthly budget would not be disrupted by this unplanned expense.

Basic Necessities Overload

Basic living necessities are no longer basic. Can you imagine the days when you didn’t have cell phones, basic cable, Internet connections, or software upgrades? Now, can you imagine even functioning in your job or family life without many of these services? And how much are all those “basic necessities” adding to the other fixed costs in your monthly spending plan?

When you wonder why you can’t seem to get ahead or make ends meet, often the problem is the increased volume of fixed expenses. Managing your money effectively may mean choosing to cut back on more of the discretionary spending to keep the expenses from spilling over onto the credit cards.

Now What?

So how does all this overload create obstacles to money management? More time and energy continues to seep out as you agonize over choices, hectic schedules, and unsatisfied wants, instead of spreading it over to important financial decisions, productive planning, and the implementation of a workable spending plan.

There is certainly no lack of information and help for getting out of debt and creating a spending plan. What could be lacking is the time or energy to evaluate the endless amount of information and determine what system would work best for your particular situation. You probably know inside what is best for you. To trigger your own insights, below are a few suggestions to help you get started.

Stop and regroup. After 9/11, everyone had a wake-up call regarding their true priorities. Review your priority list again or create one. Which activities, responsibilities, or decisions can you let go of or pass on to someone else to free up more time to manage your money on a regular basis?

Pick and save. Many money management systems already exist. Don’t try to recreate the wheel or research and compare the choices to death. Choose one and start. Worrying about the best or easiest system or the least expensive one at this point is more about procrastination. Recognize that, move on, pick one system, and get started.

Manual or electronic? If you are still more comfortable with the traditional pen and paper, start there. There are hundreds of books on the topic. To simplify your decision, go with a workbook that already has monthly forms set up. The better books will help you get organized, simplify the money management process, and save you thousands of dollars in the long run. Find a workbook that helps you manage your periodic expenses and monthly bills and tracks where the daily money is going. The same principles apply to electronic money management systems.

Simplify and streamline. Have a weekly family “board meeting” with your children and spouse. Get input on ways to streamline events in the household. Discuss financial issues so more decisions are made ahead of time, rather than impulsively. Create space and time for staying current on a regular basis with managing your money. Reduce your number of accounts. Eliminate paying bills by check. Arrange for automatic withdrawal from your bank for monthly bills, pay bills online, or automatically charge monthly bills to your credit card if you are building up the miles. Of course, remember to pay off the credit card bill in full.

No matter what the cost of any system you use, by really using it, you will ultimately save at least 10 times more than you paid for it.

Take a moment to step back, look at your life, and make decisions that are proactive and rational, instead of reactive and emotional. Remember, the cost of financial peace of mind may be priceless.

** This article is one of 101 great articles that were published in 101 Great Ways to Improve Your Life. To get complete details on “101 Great Ways to Improve Your Life”, visit http://www.selfgrowth.com/greatways2.html.