Money management can simply be said as the process of managing one’s money. It can also be called portfolio management or investment management. Another broader definition is given in the website Balance Track. According to this site, money management is the process of knowing where you are spending your money today, and having a well thought-out plan in place where you want it to go in the future. It adds that money management enables you to set goals, get organized, cut spending waste, build a budget and save money.
There are three simple steps to personally manage your money, these include setting financial goals, creating a workable financial plan and following your plan.
In the first step, you have to know what you want to do with your money and be able to spend your money according to your priorities. Your financial goals could be short-term (can be achieve in under a year), mid-term (can be achieve in two or five years) or long-term (achievable in more than five years). In the second step, you have to develop a plan or budget to wisely spend your money. And lastly, personal money management will not be successful if you will not follow through with the plan.