If you want to be financially strong then you must manage your money. There is a single sizable difference between financial success and failure is “how to manage your money?” People earn and spend because it is a natural habit; we earn to spend. Financially successful people are only because of good money management.
People who are not good at financials are only because of bad money management. The concept of money management is meaningful for financial health.
You are earning good but have bad money management; you will always struggle financially.
On the other hand, you earn average but have good money management skills, one day you achieve financial freedom.
Money Management is a part of financial literacy. One should know and implement in their life. That is not a rocket science concept instead; one must know how money works.
I am writing this article because without knowing the money management concept, I cannot accomplish my journey that I have started now in my life.
In simple words, money management is nothing more than the handling of savings, expenses, budgeting, and investing. The whole concept is involving around in between these only. I think the broader picture of money management can be understood, with the above info-graphic.
Start Here: Budgeting & Money Management
The core lies in money management in the process of budgeting. Whatever income you are getting either from your job or from business, one must prepare a budget. With budgeting, you get to know your savings and expenses. The habit of preparing a budget can save your money & time and gives you a bird’s eye view of your money cycle. With this, you get to know clearly where your money is flowing.
You can use the budget rule that distributes your money into your savings, needs, and wants.
The sizable purpose of making a budget is to lead you to limit your overspendings. Which increases your savings, and that helps you to use your savings for more productive purposes.
We earn to spend, but sometimes we earn to overspend. Why this happens is because to gratify our internal urges.
That can be overcome by delayed gratification. Thinking and spending wisely can develop a habit of delay gratification.
The next big thing in money management is to pay-off debt. Debt is not a bad thing unless it is used for leverage. If you are taking debt due to overspending, then it would be the worst thing. Debt is a thing that will not be able to help you to increase your savings. Instead, it will empty your savings slowly. I recommend if you have any kind of debt like an auto loan, home loan, or personal loan, try to finish as quickly as possible.
Because debt is a debt, and it will not be able to give you restful nights.
When I was running my business, I have a debt that gives me bad nightmares, and due to that, I was unable to save a Penney. I always prefer; before investing you must be debt-free.
When you accomplish your budgeting, limit overspending, and pay-off your debt, it is time for investing. Investing is a big concept. Investing is different for different age groups. A person who is in the ’20s has different investment strategies than a person who is in their 30’s. According to your age, you can apply your investment strategies.
Your investing shows you a path on which you walk you can acquire assets and get financial freedom.
Acquiring or accumulating assets can only be done with consistent accumulation and withholding for a longer period. It is a kind of three tyre auto rickshaw. If any tyre is not ok the auto rikshaw not able to run.
The concept of money management is not that short. That is a very vast subject and helpful for the common man. You won’t able to solve money problems without money management. It will always wonder where all your money goes. You can be trapped, again and again into money problems.
Always remember, “It is not about how much money you have; it is about the discipline and habit of money management that make difference”.
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