Taking Control of Your Money

On a scale of 1 to 10, how strongly do you feel that you are in control of your money—or is your money in control of you?

A score of 10 would mean that you feel completely in control of your money flows. You know what is coming in, where it is going, what you are putting aside, and how you are preparing for your future.

A score of 1, on the other hand, might mean that money feels completely out of your control. Perhaps you worry about bills, avoid looking at your bank balance, or find yourself wondering where all your money went at the end of each month.

Most of us probably fall somewhere between the two.

And wherever you are on that scale today, the important thing to remember is that taking control of your money does not necessarily mean earning a huge amount of it. It means becoming more aware of how money flows through your life and making conscious decisions about what happens to it.

Why Do You Need to Take Control of Your Money?

Money is not everything, but it affects almost every area of our lives.

It affects where we live, what we eat, the choices available to us, how we spend our free time, and what we are able to do when something unexpected happens.

When money becomes a constant source of worry, the effects can reach far beyond our bank accounts. Financial stress can affect our sleep, relationships, confidence, health and overall sense of wellbeing.

For women in midlife, this can become particularly important.

Our financial circumstances may be changing. Children may be leaving home—or still needing financial support. We might be caring for ageing parents. Our relationships may have changed. We may be thinking about retirement, changing careers, reducing our working hours, starting a business or simply asking ourselves what we want the next stage of our lives to look like.

That is why understanding and controlling our money flows is so important.

If you don’t take control of your money flows, they can begin to control you.

There is an old saying:

“Money is a good servant but a bad master.”

The message is as relevant today as it ever was. Money can be an incredibly useful tool when we decide how we want to use it. But when we lose control of it, money worries can start dictating our decisions and limiting our choices.

Understanding Your Money Flows

Money is constantly moving.

It comes into our lives and goes out again. Some of it pays for the things we need today. Some may be set aside for tomorrow. And some can potentially be used to create more money for the future.

To begin taking control, there are four main money flows that you need to understand:

Earn. Spend. Save. Invest.

Each one plays a different role in your financial life, and understanding how they work together can help you feel more confident and secure about money.

1. What You Earn

The first money flow is the money that comes to you.

For many people, this means a salary or wages. But income can come from many different places: a business, freelance work, pensions, investments, rental income, benefits or additional work on the side.

One of the first steps towards taking control is simply knowing exactly how much money is coming into your household.

Ask yourself:

Where does my money come from, and is it enough to support the life I want?

During midlife, this question can become particularly interesting because it may be the first time in years that you have seriously considered changing how you earn money.

Perhaps you want to turn a skill into a business. Maybe you want to ask for a pay rise, change careers, work fewer hours or create another source of income.

Taking control begins with understanding what you currently earn—but it can also mean exploring how you might increase or diversify your income in the future.

2. What You Spend

The second flow is often where money seems to disappear.

We all need to spend money. We need somewhere to live, food to eat, electricity, transport and all the other essentials of everyday life.

But there is a difference between spending money consciously and simply allowing money to flow out without really knowing where it is going.

Small purchases can accumulate surprisingly quickly. Subscriptions we no longer use, impulse purchases, frequent treats or simply paying more than necessary for everyday services can gradually reduce the money available for the things that really matter to us.

This does not mean that you should stop enjoying your money.

Quite the opposite.

Taking control of spending means deciding what is important to you. It is about making sure your money supports your priorities rather than disappearing on things that add very little value to your life.

Look at your spending without judgement. You are gathering information, not giving yourself a telling-off.

Once you know where your money is going, you can decide whether you are happy with those choices.

3. What You Save

Saving is about keeping some of today’s money for tomorrow.

Savings can provide something extremely valuable: breathing space.

An unexpected car repair, household expense or change in circumstances can feel very different when you know you have money available to deal with it.

Saving can also help you work towards something positive—a holiday, a new home, a business idea, a special experience or simply greater financial independence.

You don’t necessarily need to begin with a large amount.

Developing the habit of saving regularly can be more important than waiting until you feel you have “enough money” to start.

Ask yourself:

If something unexpected happened tomorrow, how financially prepared would I feel?

Your answer can help you understand whether saving needs to become a bigger priority within your money flows.

4. What You Invest

The fourth flow is investing.

Saving and investing are not the same thing.

Saving generally means putting money aside for future use, whereas investing involves putting money into assets with the aim of growing its value over time. Investing also involves risk, which means it needs careful thought, understanding and planning.

For many women, investing can initially feel intimidating. It may seem complicated or like something that is only relevant to wealthy people or financial experts.

It doesn’t have to be.

The first step is education.

Understanding basic investment principles, risk, time horizons and the different options available can help you make more informed decisions about your financial future.

You don’t need to become a financial expert overnight. You simply need to become more involved in the decisions affecting your own money.

Where Are You Today?

Now return to the question at the beginning.

On a scale of 1 to 10, how in control of your money do you feel?

Whatever number you chose, don’t judge yourself for it.

Instead, ask another question:

What could I do to move myself just one point higher?

You don’t have to transform your finances overnight.

Perhaps your first step is checking exactly how much you spend each month. Maybe it is cancelling subscriptions you no longer use. It could be setting up a regular savings payment, reviewing your income or beginning to learn about investing.

Small actions can gradually create a much greater sense of control.

The aim isn’t simply to accumulate money for the sake of having more.

It is to make money work for you.

When you understand what you earn, consciously choose what you spend, regularly save, and learn how to invest appropriately for your circumstances, money can become less of a source of fear and more of a tool that supports the life you want.

And that is what taking control of your money is really about.

Inside the Money & Wealth section of the Midlife Butterfly Club, we explore each of these four important money flows in greater detail, helping you understand your relationship with money and take practical steps towards greater financial confidence.

Because whatever your financial situation looks like today, understanding your money is the first step towards taking control of it.

Love,
Jean