The journey to financial success begins at home with the management of your personal finances. Some physicians, although well-intentioned, seem to always find themselves playing catch up and never quite in control of their money matters due to the demands of their careers. If you want to manage money like a pro and experience financial success, you need to do what the pros do a make your personal finances a priority.
The challenge most physicians face in managing their money effectively is their inability or reluctance to treat their personal finances like a business. The goal of individuals in money management is no different than that of a business, which is to manage cash flow each month to generate a surplus that can be reinvested in the business to help it grow. Businesses that can do this consistently are the most likely to succeed, and the same is true for individuals.
Steps to Managing Your Money like a Pro
Make Your Finances Your Business
Adapt the mind-set that you are running a business in your home. Give it its own time and space, and keep it separate from the rest of your activities. Carve out a workspace that is devoted strictly to finances and set aside one desk drawer. Have one inbox for incoming bills, statement and receipts and keep any other financial documents or past statements filed away.
Place any unresolved financial issues (bill disputes, current correspondence, etc.) organized on top of your workspace. Your goal is to empty that folder by the end of the month. Finally, schedule blocks of time for personal finances – five minutes a day, 20 at the end to the week, and 45 minutes at the end of the month – and keep to your schedule.
Paper causes clutter and clutter leads to chaos – the biggest obstacle to effective money management. In this digital age, there is almost no reason to collect more paper. Nearly all of your financial activities can be done online. In less than an hour, you can convert your accounts statements to paperless, and set up online bill paying. Statements and bill reminders will arrive in your email box.
It’s recommended that you set up a separate email account strictly for your personal finance activities, so you don’t lose statements of bill notices in spam. Also, you don’t want them to become buried deep down in your email inbox. At the very least, create a separate folder and move any financial correspondence you receive immediately to that folder.
If you’re reading this from your internet browser on your computer, then you have the capability of managing your finances on the computer, and why wouldn’t you? Software on online money management programs, many offered for free, can save you a significant amount of time, and provide you with a much clearer picture of your finances. Sure, there is a learning curve and an investment of time to get it started, but the benefits can be invaluable.
Online personal finance sites, such as Mint.com, provide a free and secure end-to-end money management tool box, so there is really no excuse for not going digital with your finances.
Budget like a Pro
Budget planning can be tedious and time consuming, but your financial success depends on it. Again, online personal finance programs can take the tedium out of the process and make the experience much more meaningful. Instead of merely listing expenses, you can link your spending goals to financial goals and let the program track your progress automatically. The key to effective budget planning is accountability and these programs don’t allow for any fudging or game-playing. In short, they force you to manage your personal finances like a business.
Start with these steps and soon your financial picture will become clear. Once you understand your spending, you can focus on where you can easily cut expenses and start focus on investing and eliminating debt.