Money Management is where the proper handling of money is applied. Proper management of money is important in our daily lives. Success in life is based on how you manage it.
It is really a great challenge to manage your money. As we all know that we all live in a society where all of our neighbors are flooded with lots of products and you are there wanting to have also what they have. It doesn’t work that way. You need to budget, save and invest your hard earned cash to be productive and become a millionaire as well (King 36).
Set-up your own goal and develop it to have an organized system. What should be your goal? For instance, your goal is to gain more money in 5 years time. The question now is what can you do to attain your goal?
One possible way is through budgeting. You must know where your money goes, how much comes in and how much goes out so you will know if you really save. In budgeting, you need to know your purchases which include your basic necessities and the payments for your bills. Furthermore, a 20% of your salary or income must be included to your budget. It is a smart decision. If you save 20% of your salary per month, you will be astonished for the money earned in five years time. That is a lot of savings on your part. Even though, you have a small income monthly, you can still save money. So, don’t be discouraged if your salary or income generated for the whole month is small. (King 35)
Also read: No Money, No Honey
Saving practically also means a wise spending. In this case, we must avoid inflation. It only happens when more money is needed as against the total supply of money available. To site an example, you buy more foods than you actually eat. You help increase the price of goods because the higher the demands of a certain product in which its supply is few, the price of the product becomes higher (King 36).
When you shop, you need to have a comparison to distinguish which is the lowest price. Furthermore, plan to shop when there is a sale or discounts. It is really a great help on saving your money.
Don’t avail credit cards. It’s so tempting and almost 70% of people who use credit cards are actually indebt (King 39).
Saving and budgeting are more on practicing self-discipline. Acquiring this attitude means you have the potential of managing your money properly.
After budgeting and saving your money, you have to find the right kind of investments for your hard earned money comes from your salary or profit from your business. An investment is something to purchase in which has potentials in getting your money back more than you spent for a certain purchase. You need to invest to have more gains like in mutual funds. A mutual fund is a regulated investment company with a pool of assets that regularly sells and redeems its shares. However, this opportunity is risky. There are times that the shares are decreasing after a long period of time. There are many to invest, like in lots, after long years, the price increases.
It is hard to become a millionaire. It will take you years to be one, but if you know the proper management of your money and acquire the winning attitudes, you are not far to become one.
King, David. You Can Be Rich. Worldlink Marketing Corporation, 2002.