I'm pleased to announce the second edition of my workbook in the Managing My Life series – Managing My Money. This workbook is a bit different from others in the series in that it has a bit more text and not as much in the way of exercises because it's designed as a learning resource as well as a planning tool. The nature and scope of the underlying theme – managing money – is one which is quite broad and which has many different facets and applications, and the workbook seeks to address several of these.

The workbook starts off with a general discussion about why there's such a mystique about money. While it's a simple five-letter word, the understanding and comfort that most people have with money is much less satisfactory than they would like. Many people feel as if their need for money manages their life rather than them managing the benefits and value of money in their life.

When understood and used appropriately, money is a powerful tool. It plays many different roles in our life: to control, to feel good, to reward, to punish, just to name a few. Just as there are positive uses of money, there are destructive uses as well, and when our feelings and actions around money appear to be out of control, we often can feel as if our entire life is out of control. That's how powerful money can be.

But used properly, money is nothing more than a servant whose purpose is to support your dreams, goals, hopes and aspirations. But to be a proper servant, it needs a proper master, which is something the workbook seeks do – educate the user in becoming a proper master – as well as a proper steward – of their money.

Why is it important to learn good money management skills? Because then you will feel more in control of the forces money plays in your life. While you don't need to be an expert, you do need to develop an understanding of how to use money in ways which are in synch with your values, your motivations, your goals, and your objectives. And, if you rely on the advice you seek from others when it comes to money matters, you need to understand how to evaluate the adequacy and appropriateness of that advice, especially if it comes from someone who benefits financially from a transaction you make based on that advice. That is, they get paid because you purchased an investment or insurance product from them.

Planning for the effective and appropriate use of money is important because without developing a vision for what you seek to achieve from your efforts at bringing money into your life, you will never know if you've reached your goals and objectives. As the old saying goes, if you don't know where you're going, then any road will take you there! But then, you'll never know when you've arrived at your destination.

The first exercise in the workbook asks the user to score where they stand with respect to their current money management issues, including Goal Setting, Risk Tolerance, Investments, Retirement Planning, Risk Management, Cash Flow & Debt, Estate Planning, and Education Funding. Once you identify your areas of strength and weakness, you can then turn to the specific area of the workbook to seek additional information.

The workbook then turns to the different sources of income we may have an opportunity to use, which include our resource of time, our resources of assets, and our resources from employer- and government-sponsored programs. Often these sources of income aren't enough to cover all of our expenditures, so the next section presents ideas for saving and budgeting which can help your hard-earned dollars stretch a bit further.

One important lesson the workbook seeks to impart is how to more clearly differentiate between your needs and your wants. While we all want to "live larger" and improve our standard of living it's important to recognize the differences between needs and wants so we are using our money in ways which bring meaning into our lives. Most people spend much more money on their wants than on their needs with the consequence that there's little left over for saving and/or investing.

An exercise which seeks to drive home the point is one which helps the user determine the amount of work time it takes to pay for an expense. Starting with the gross hourly wage, it subtracts taxes and other payroll deductions to arrive at the net-take-home pay per hour. Then, dividing this amount into the expenditure amount, one can determine how long they have to work to have enough money free and clear to pay for the thing they need…or want.

The workbook sections which educate the user in the areas of personal investment alternatives include:

• An overview of the different types of risk
• A discussion regarding pre-tax and after-tax investing
• Rule #1 – Pay Yourself First!
• The difference between savings and investing
• Knowing whether you are an "owner" or a "lender", and
• Diversification and Asset Allocation

As if that isn't enough to think about, the next three sections delve into the basics of tax planning (which should be a year-round activity for most of us), how to review and understand your insurance needs, and estate planning considerations. This last section provides users with checklists and forms which are tailored to be helpful for both modest and more complicated situations.

In the next section, users will learn about selecting, interviewing and working with a financial advisor. This includes a review of the different types of financial advisors (planning and sales professionals), investment and insurance transaction costs, and how planning services are priced and paid. A unique discussion of your financial personality and financial compatibility finishes out the section.

The final section offers many different internet resource links and summaries in the areas of Career & Business, Caregiving, Estate and Later Life Planning, General Money Management (including investment, insurance, and legal resources), Health & Medical, Home Buying & Moving, Life Planning, Marital Status Change, and Parental & Family Needs information.

While the list of resources is comprehensive, it is by no means exhaustive. New internet sites are started all the time, and I was limited by time deadlines. But since the workbook is designed to be easily updated electronically, please feel free to submit new sites for consideration to me at Shags@PlanningForLife.info.