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These suggestions may be classics but it's amazing how many people have no idea.

Before I got lucky and married a man who knew a thing or two about money management, I was one of the clueless masses. Imagine my amazement when he suggested we design a budget. A what?

Then he asked me to keep a journal and write down every penny I spent. He'd been doing this since he was nine! Honest! Did he came from Planet Money or something? It was a painful education, like My Fair Lady; John in the Henry Higgins role and me, Eliza Savelittle. When I threatened to rebel we agreed to see a financial planner. She may have saved our marriage.

You don't have to learn the hard way. The Journal of Financial Planning put together this starter list:

1. Create a Budget and Track Your Expenses

"Most clients are usually very surprised at the amount of
money that they can't account for," said
Richard S. Gardner, CFP®, of Lionheart Financial Planning,
Inc.,
"I then ask them
to write down every expense and purchase they make for a month by
carrying a notepad with them. At the end of the month, they usually
have a good idea how much money is being wasted at the local
Starbucks or McDonalds and are willing and able to get their
discretionary spending under control to help set funds aside for
their more important goals."

2. Build an Emergency Fund

"I require my clients have an emergency fund equal to at least
six months, though 12 months is best in this environment, of
non-discretionary expenses such as mortgage, loans, utilities,
groceries, and insurance premiums before I will set up any kind of
investment portfolio for them," said Gardner. "This helps keep them
out of credit trouble if things don't go as planned or someone
loses a job and they don't have to resort to credit cards, loans,
or tapping retirement accounts for funds."

3. Learn How to Save and Spend

Gardner suggests the best way to learn how to save is to have
funds deducted directly from your paycheck or deposit account and
redirected to savings vehicles. "It's the old 'out of sight, out of
mind' adage," he said. 

In addition, Gardner says learning to be money smart can start
when children are young. "I routinely provide basic financial
education to the children of clients. This education teaches them
how to open and maintain a checking and savings account, track
expenses and live within their means. I find that most kids,
especially teenagers, are more receptive than we adults give them
credit for…"

4. Understand Your Relationship to Money

If you can't get a handle on your spending, it might make sense
to schedule an appointment with a local psychologist who deals regularly with money issues.

Our relationship to money can be very complicated and many of us find it uncomfortable to talk about it. This is an area I've worked in for many years, with individuals and couples, most recently due to the recession. If you think your attitude toward money could be getting in the way of managing it wisely, give me a call.


5. Create a Backup for Mortgage Emergencies

If you anticipate any difficulties paying your mortgage,
consider assembling a list of local experts in lending, bankruptcy
and estate issues.

Or… consider renting out rooms in
your residence to responsible people you've screened, as a way to
help manage those future payments.

6. Understand the Tax Consequences of Tapping Various Assets

Should you never deplete your emergency fund, financial planners
say it's worth understanding the tax consequence of tapping certain
assets in certain types of accounts vs. others. Talk to your planner or accountant before you withdraw from or cash in any asset.

7. Look for Simple Money-Making Opportunities

When your debt is high, and income is not sufficient to cover
your expenses, …consider the benefits of taking
on odd jobs, selling unwanted or unneeded home items, or perhaps
taking on a second job to help bring your finances under control.
"I tell people to take on jobs in their immediate communities that
don't involve a big investment in transportation, clothes, or other
work-related expenses so they are able to keep more of what they
make," Louis J. Schwarz, CFP® said
.

8. Be Ready to Reset Your Retirement Expectations

It's quite possible that you're concerned about your money
lasting over your lifetime. If you're retired, Gardner suggests you
consider taking a part-time job to combat that concern.

For those not yet retired, Schwarz suggested in the Journal
of Financial Planning that "you sit down and plan for a
better-paying job or career once the economy recovers, and take
time to look realistically at your current retirement plans and set
a new plan, even if it means retiring significantly later."

A financial planner can help you create a custom-tailored toolkit to help you
get debt under control. These steps go a long way in reducing financial anxiety and (who knows?) may even save your marriage!

Photo courtesy of _ES via Flickr