Andrew Woodward Shares Five Steps To Better Money Management

When it comes to money management, most people automatically think of a budget. Let me tell you straight up, I hate budgets. To me a budget is like a diet, great on paper, but useless when you need it most. I’ve tried a few diets, so I know what it is like.

If all the diets that exist worked, why is there a multi-billion-dollar industry for weight loss? It’s the same with budgets, if they worked, more people would be wealthy and happy with their financial circumstances. Now I know that is a generalisation, but you get the point.

The good news is that there is a solution, one that fits with your lifestyle and delivers a positive outcome at the same time. Here are my five steps to better money management that include the secret sauce, the thing that makes all the difference to your success.

Create a Money Plan

The first step is to create a money plan. Now I know I said I hate budgets and you’re already thinking that a money plan is just a budget in a different dress, but stick with me, there are some crucial differences.

With a money plan, you look at your current lifestyle and plan how you want to spend your money. It does require looking at your income and expenses and converting everything to a monthly amount. If you pay electricity quarterly, then you need to convert that quarterly cost to a monthly amount.

You do this for all your expenses, including your mortgage or rent, living expenses, entertainment, health, insurance, groceries, the works.

  1. Planned Future Expenses

Now one of the main differences to a budget, is we are also going to consider what I call ‘planned future expenses’. These are the ones that are often forgotten when it comes to budgets, costs such as Christmas and birthday presents, holidays, house maintenance or a car replacement. With planned future expenses you work out a monthly amount that needs to be set aside to be able to meet the cost when you want to.

That means, if you want to replace your car in three years, you calculate the cost and divide by 36 to get the monthly amount you need to set aside to have the money to buy it in three years.

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  1. Spend Less than You Earn

I am certain you have heard this one before, spend less than you earn. Sounds easy, but for a lot of people it isn’t that simple. Once you have done the first attempt at the money plan you will know whether you are spending more or less than you earn monthly. If you are spending more than you earn, than you know what you must do right?

This is how we can fit our lifestyle into our money circumstances. It is no point putting your head in the sand and ignoring the shortfall. Instead, we get to put our big girl pants on and make the hard decisions. Where can you reduce your spending, or increase your income, to cover the shortfall?

Let me give you some quick ideas, first one is ringing your bank and ask for an interest rate discount. The banks are falling over themselves to stop you from switching banks, so make them earn your loyalty. Then move on to electricity, health insurance, internet provider, mobile phone plans. All of these are good places to reduce your costs, without having to change your lifestyle one bit.

The aim of this step is to ensure you have a positive amount at the bottom of the money plan, that is, your income exceeds your expenses.

  1. Automate

The secret sauce of the money plan process is in automating the outcomes. This is where you create a few different bank accounts and set up automated transfers a day after your pay hits your account to transfer the funds to dedicated bank accounts.

You will need one each for living expenses, bills, planned future expenses, and growing your wealth. The power of this process, the thing that makes it so much more powerful than a budget, is that you learn to live only on what you planned to be your living expenses.

I recommend you transfer weekly to your living expenses account and make sure it is a debit card account. If it runs out on day 5 or 6, so be it, you wait until the next top up at the end of the week and go again. This builds discipline and ensures you don’t overspend.

All the money required to meet your bills is going to the bills account, which you use as and when the bills arrive. So, when the quarterly electricity bills arrives, you don’t have to worry, because you have been putting money aside each month to meet the cost.

  1. Emergency Buffer

The final tip is that you use a portion of the surplus amount from your money plan to accumulate an emergency buffer. The emergency buffer should be the equivalent of 3-6 months of your living expenses.  By accumulating this buffer over time, you increase the security to your money circumstances in the event that something goes wrong, such as the loss of a job or illness. In an emergency you have some money set aside that you can use until you get back on your feet.


Having a plan for your money not only solves your money stress, but it also prepares you for growing your wealth. The remainder of your surplus is used for investing purposes to secure your financial future. The sooner you start, no matter how much you have, the longer you will have that money working for you, and time is the other secret sauce when it comes to wealth creation. The more time the better.

Can you see how a money plan would solve your money worries?


About The Author

Andrew Woodward: Andrew is a certified wealth coach and passionate cyclist. As a ‘financial educator’ with over 25 years’ experience he teaches business owners, entrepreneurs, and household CEO’s how to grow their wealth across multiple asset classes, without the need for someone else to do it for them. For the last 7 years he has been teaching people in Australia, New Zealand, Canada and the US, using his unique 3 pillar framework incorporating his money management and investing courses, to secure their financial future – knowing that nobody cares more about your wealth than you!

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