Understandably, taking control of your cash makes financial management easier. After all, when you control where your money goes instead of the other way around, the things you want to do financially happen.

Taking control of your cash requires two things:

1. Monitoring what you’re doing and…
2. Having a plan.

Monitoring What You’re Doing

You need to know how much you’re really spending, and on what. It’s too easy to think you’re spending one thing, and really be spending something different.

For example, I just mentally estimated how much I spent yesterday on odds and ends. The total in my head was “about $5”. The total in reality was $15.44, not including a large bill that I paid.

Find a way to track spending that works for you, and then do it frequently and consistently.

Having a Plan

To get what you want, you need to know what you want to buy or spend money on each month, and how much you want to spend on each of the categories. It’s good to put big dreams into your plan too, if you really want to do them.

Want to get your house paid off, like we do? Put it in your plan, broken down into what you can afford to send to the mortgage each month. Want to retire someday? Put your retirement contributions into your plan. (And then automate them.) Don’t forget your regular household expenses too.

Even boring things like trash pickup or the phone bill should be in your plan, because they’re not so boring after all if you run out of money and aren’t able to pay for them.

Does this sound like a budget yet? It probably should, because that’s what it is. It just sounds a whole lot better when you call it a plan. Calling it a plan is more accurate too, because it’s not about restricting you. It’s about enabling your dreams. Just prioritize the plan so that the most important things to you are listed first.

Once you’ve got your plan in place, you can use little tricks to help smooth out any seasonal bumps. Some of those tricks include signing up for budget helper utility plans where your total payment over the course of a year is divided out into 12 equal payments, or setting money aside monthly yourself in an ING account for things that you only spend money on once or twice a year (like taxes, holidays, and car insurance.)

Keep in Control

After that, it’s a matter of implementing and adjusting. Keep monitoring and keep planning, and make the adjustments you need to get to where you want to be. Remember, plans evolve and improve with time, and you’ll feel more confident as you continue to control your cash.