What is Money Management?

Many people wonder, "what is money management?" The term, money management, can have different meanings depending on one’s perspective. It means one thing to an investment portfolio manager and something altogether different to a gambler.

For our purposes, we are referring to personal money management. Everyone who has money is involved in some form of money management, whether they realize it or not.

Some money management tasks are should be routine, such as:

• Balancing your checkbook.
• Making sure you get paid as promised.
• Counting your change.
• Paying your bills on time.
• Seeing that you are not overcharged.
• Keep track of spending.

Other aspects of money management require a greater effort, either in thinking, time, or determination. They include:

• Using personal budget planning techniques to set up a budget you can live with.
• Controling impulsive spending by determining what you can afford to buy and making sure you don’t spend more than you earn.
• Managing credit card debt and ultimately, determining how to eliminate debt entirely.
• Developing a financial freedom plan as a road map to keep you on track to reach your future goals.
• Practicing financial planning for retirement in order envision and prepare for your post-working years.
• Determining how to invest money.
• Reducing financial risk for yourself or your family.

We all can improve our money managing skills by taking an active interest in personal finance. We can also improve by educating ourselves about financial topics such as saving, spending, budgeting, investment, and debt.

So, what is the definition of money management? It is overseeing all aspects of earning, spending, and investing money. Good money management requires conscientious effort.

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