Money is a very important factor in our lives, there are a lot of things you can do if you have it and a lot of things you may not be able to do if you don’t have it. This article helps you understand some simple and practical money management tips. Enjoy your reading…
1. Don’t spend more than you earn
You need to deliberately and continually ensure that your expenses are below your income. It takes a lot of discipline to achieve this because there would be a lot of times when your needs may exceed your income.
A lot of very wealthy people become wealthy because they have the ability to delay their spending. They disciplined themselves to spend much less than they earned. Ensure that you always spend within your income.
2. Have more than one source of income
It is not advisable to have only one source of income because there is no real guarantee. To be on the safe side, you should have as many sources of income as your time and strength will permit.
There are a lot of avenues to make passive income in recent times. Get information on any one that you may be interested in and start increasing your sources of income.
3. Develop the habit of saving
The secret of saving is to start by saving small amounts. A lot of experienced people have advised that saving 10% is ideal, you may go above that depending on your spending habit. If you have not been saving in the past, starting with 10% may be difficult so you could start with a lower percentage. You can start increasing the percentage as time passes, just start somewhere and don’t stop.
4. Increase your financial knowledge
This is one area you must strive to constantly increase your knowledge. There are a lot of good books, audio and video tapes that have been produced in the area of personal finance management.
Invest your money and time on such materials and constantly increase your financial knowledge. You can start with one financial management book per year and increase the number as it becomes a part of you.
5. Don’t spend on impulse
Sometimes you may face the temptation to spend on impulse. You walk through a shop, you see an item you really like and without careful thought, you purchase it.
Try to avoid such temptations, learn to have a spending budget for each month and work with it. You will be able to control your expenses if you have a budget for each month and stick to your plan.
These are really simple techniques that anyone one with any level of education and income can put to practice. I hope you find them very helpful!
Photo Cred: Mint.com