I took a peach pie over to my friend’s house last weekend. This seemingly mundane activity sparked quite an interesting conversation:

Friend: I have been meaning to make a pie for years.

Me:       Really, years?

Friend: Well, summers go by really fast.

Me:       Pie doesn’t really have a season.

Friend: Maybe I’ll make a pie next year.

Me:       You can make a pie in like an hour!

Friend: I don’t have a pie server.

Me:       Well in that case, you’d better wait.

On the way home, I was thinking that if my friend can come up with multiple excuses not to make a pie, imagine how many excuses there must be to avoid money management. You are probably thinking that my friend’s excuses not to make a pie are lame, right? Well, I think most excuses are. For example, I asked a few people why they aren’t doing what they know they should be doing with their money. Here’s what they said:

-Times are tough right now.
-I need more time to research my options.
-I’m looking for a new job.
-I think I’m doing okay.
-I haven’t had a chance to go in and update the software.

Pretty lame, right? What’s your excuse?

I live in a constant state of “What to do?” Being an adult is hard, especially when it comes to managing money and budgeting. I want to make the best possible decision, but the best decision isn’t always clear. To be an effective money manager, it takes budgeting, decision-making, and planning.

-Develop a budget. This is major! You won’t be able to effectively manage funds without a budget. List all sources of income and all monthly expenses. This will help you know when and what bills are due so that all bills are paid on time and there is enough money in your account to pay them.

-Determine wants vs. needs. A huge decision I had to make was whether or not to get cable. I choose not to get it because it is an extra bill I don’t need. Determine what you can afford right now and what you can put off until later. Also, try bringing your lunch to work instead of eating out. Look at some other areas where you can cut back, like, getting a lesser phone plane or cutting out weekly manicures.

-Don’t put off saving. Having money set aside is important, especially when unexpected expenses come up, like, buying tires for your car. Each month my bank automatically debits a preset amount from my checking account into my savings account. This is an easy way to save and the savings account quickly grows over a period of time.

-Don’t rely on credit. Purchasing items on a credit card may seem like a good idea at first, but carrying a large credit card debt (that you can’t afford to pay back) will make a difficult situation even worse. It will also hurt your credit and cause you to be denied other forms of credit that really matter, like, taking out a mortgage someday.

-Get into a realistic payment plan for student loan debt. Student loan debt is a reality for many college graduates. According to a 2008 College Board study, two out of every three undergraduates walk across the stage with some form of student loan debt. Consolidation is a good option because it lowers your monthly payment, but it may not be the best option for everyone. The longer a loan is extended the more interest will accrue. If you cannot afford the monthly payments on your student loan debt contact your loan provider. You may be able to get into an interest only payment plan for two or four years. Deferment and forbearance are also options, but if you are working I would encourage new grads to pay something on student loan debt instead of putting it off.

-Seek the financial guidance of someone you trust. Mentors are valuable in giving advice especially in areas that are unfamiliar and often confusing like buying a car. You should choose someone that has a pattern of making good financial decisions for themselves. This can be anyone from a parent, pastor, former boss, older sibling, hair stylist/barber, or professor. I choose a close family friend that runs his own business. I can call him anytime and ask a question or advice.

Finally, if you have cut out and cut back as much as possible and money is still tight get a part-time job. Look for freelance or part-time work in a field that interests you, like, freelance photography. You’ll bring in extra income and hone your passion.

Are you overwhelmed by the sheer volume of financial information available today? If so, you aren’t alone. In fact, research shows that Americans are so overwhelmed by their financial choices that many feel “paralyzed and confused.” Basically, we are afraid of making the wrong choice, so we too often make no choices at all. In the psychological world, this is known as Decidophobia: fear of making decisions.

In addition to analysis paralysis, there is a lot of bad news out there to feed our fears. Every day we are bombarded with words like foreclosure, losses, inflation, unemployment, repossession, and bankruptcy. The good news is that making financial decisions doesn’t have to be a frightening experience (unless of course you have Chrometophobia: fear of money!)

While I generally feel that educating yourself about current events can help you make informed decisions, I also believe that sometimes enough is enough. When it comes to money management, things don’t change all that much. Don’t believe me? Here are ten tips to money management that I published more than TEN YEARS AGO that still apply today (totally unedited!)

1. PLAN - Plan for the future, major purchases and occasional expenses like car insurance or taxes.

2. SET FINANCIAL GOALS - Determine short, mid and long range financial goals.

3. KNOW YOUR FINANCIAL SITUATION - Determine monthly living expenses, occasional expenses and monthly debt repayments. Compare outgo to monthly net income. Be aware of your total indebtedness.

4. DEVELOP A REALISTIC SPENDING PLAN - Follow your plan as closely as possible. Evaluate your plan by comparing actual expenses with planned expenses.

5. DON’T ALLOW EXPENSES TO EXCEED INCOME - Don’t charge more every month than you are repaying to our creditors. Avoid paying only the minimum on your charge cards.

6. SAVE - Save for expenses which occur infrequently, such as car and home maintenance. Save 5 to 10 percent of your net income. Accumulate 3 to 6 months salary in an emergency fund.

7. PAY YOUR BILLS ON TIME - Maintain a good credit rating. If you are unable to pay your bills as agreed, contact your creditors and explain your situation. Contact a nonprofit credit counseling agency for professional advice.

8. RECOGNIZE THE DIFFERENCE BETWEEN NECESSITIES AND THINGS YOU DESIRE - Take care of necessities like food and housing first. Money should be spent for wants only after basic necessities have been met.

9. USE CREDIT WISELY - Use credit for safety, convenience and planned purchases. Determine the total you can comfortably afford to purchase on credit. Don’t allow your credit payments to exceed 20% of your net income. Avoid borrowing from one creditor to pay another.

10. KEEP A RECORD OF DAILY EXPENDITURES - Be aware of where your money is going. Use a spending diary to assist you in identifying areas where adjustments need to be made.