Money Management Basics
If you are like me then you weren’t raised in a rich family. And I am sure that you have seen that post on social media that says if you didn’t come from a millionaire family, a millionaire family should come from you…words to that effect. Well, for some of us, the issue is that we have ZERO FINANCIAL LITERACY. We work hard and study hard for everything else, so why not be more conscious in our efforts to become financially literate? In this blog I want to discuss three simple things that anyone can do to get started. Disclaimer I am not a licensed financial advisor but I have a plethora at my disposal if you need one.
Three of the things I think are essential when one is just starting off include: 1. An honest assessment, 2. Learning how to create a budget and 3. Education.
Honest Assessment: You cannot change what you don’t know. It is just that simple. In order to know where you need to go, you need to know where you are. Even malls have a”you are here sign” on the directions map! So, do a proverbial autopsy of your financial state. Write down every debt you owe: credit card, car note, mortgage, EVERYTHING, regardless of how small it is. Also write down the things that are assets. These are things that can generate money. What are your spending habits like? When you go to make your next purchase think about why you are making it. Some of the things you will discover here might not be pleasant. Maybe you really do waste money on trivial things. Knowing is the first half of the battle. Remember, we cannot change what we don’t acknowledge. In addition, look at the bills you create. Some are very necessary: we all need light, water and so on. However, is it really necessary to have 4 different wigs and 12 different Malaysian bundles? Is it a must to have those acrylic nails that we have to refill every 2 weeks? I am not saying these things are inherently bad. What I am saying is, honestly, if we sacrifice these things entirely for a season, or cut back a bit, will we die? No we won’t! The real issue is are we willing to do the hard thing now to have it easier later. Honestly, are you?
Budget: I am sure there are a few budgeting tools that exist (for a later post I will research them and let you know my thoughts). In a simple way, a budget informs you of your expenses for a particular time frame, normally one month. When you know your budget, you can anticipate how much of your income will be expended and how much you can retain. Budgeting is another way to keep abreast of all that you are spending. If you don’t know where your money is going, how can you manage it?
Education: I cannot stress it enough. You, I, we have to read. Nurses, lawyers and other professionals have to do “continuing education courses” to keep current of what is happening in their field. It is even more imperative, I think, for us to keep current of this lifelong career called financial freedom. The more we learn, the more our mindset will change. And most of the work has to start there. For some, we need to change how we view money and wealth. You can have a lot of money and still be poor! Or, regardless of how much money you make, you will continue to be poor if you don’t learn to manage it well. I am not saying that you need a degree in Finance. Little by little increase your knowledge about money and how to manage it. Grow your mindset. Increase your discipline. Start small but be consistent. Then watch how your money transforms.
As D would say, It is never too late for a shower of rain!
How are you managing? Not well? Then get started! What are you waiting for?
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