Money is an important aspect of life. From a young age, society emphasizes the need to get a job and become financially independent. But one of the key aspects that is underestimated and not even taught in schools is money management which can go a long way to saving up money and making judicious use of resources available to you. The lack of focus on personal finance leaves a lot of young adults clueless about money and taxes after they graduate high school. As soon as they’re an adult, they’re thrust into a life full of responsibilities which can be overwhelming if not prepared for prior. Sure, there are tips online – like those at https://www.bonbonshalal.com/four-tips-for-sound-money-management/, for example – but generally, these adults are unprepared. Hence it becomes imperative to teach oneself about finances as it tends to be a huge part of adult life.
The situation has gotten so grave that some governments and schools are requiring students to take basic finance classes before graduating which should remedy some of the problems. But that is a long-term solution, for now, these tips should come in handy on how to best manage your finances and live the life you want.
Self-control is one of the most important aspects of money management and it can’t really be practiced without some form of discipline and determination. The need to spend money mindlessly can often be immense but it’s those moments that require the most amount of thoughtful resistance. The art of delaying gratification is helpful not just in money personal finance, but also in almost all other aspects of life. Every time you enter a shopping mall or a shop and see shiny new products, they’re designed in a way to be attractive and instantly gratifying to purchase. It gives a feeling of high and participation. But it’s all a sham to get you to buy more things that you most likely don’t need. Hence, it’s best to think twice before every purchase and judge whether it really impacts you meaningfully.
Distinguish between wants and needs
Being able to differentiate between a need and a want is an important ability. Most of the purchases we do are usually wants. It is okay to spend money on them in moderation, but not when you don’t really have any need for the product or service you’re buying. Needs such as rent, food, utilities need to be taken care of first, and only then give yourself the privilege to splurge on what you want. It would not only feel less stressful having already taken care of the basic expenses but will also go a long way in saving money.
Use a budget planner
Use any money management software, app, or good old diary to keep track of recent expenses. Divide your expenses into categories such as necessary, luxury, leisure, investment, etc to see where your money is going. After dealing with past expenses, plan your expenses for the future month and write down your expected costs and income.
Create a savings or emergency fund
An emergency fund is one of those things people usually realize a little late how necessary they are. Nobody has seen the future, meaning anything can happen to you. Whether that be someone close to you passing away, you falling ill or getting in an accident, or getting evicted, etc. Emergency or “rainy day” funds come to the rescue during these times to save you. Set aside a small portion of your monthly or weekly income to put into an emergency fund you never touch unless absolutely necessary, this is easier if you put it into a savings account with places like Atlantic Union Bank (Click here to go to atlantic union bank) so that you can see your savings grow and not be tempted to spend your allowances. This will prepare you for the most unexpected of problems life throws at you.
Look into investment options
While most banks provide a normal savings account that provides some interest on your account balance over time, they’re usually not enough to keep up with things like inflation and there are often better investment options available. Some of the lowest risk investments with good returns are fixed deposits or mutual funds. Both provide a better interest rate than your normal savings account and can be worth looking into.
Look after your health
It has been rightly said “health is wealth” and that is nowhere more apparent than in money management. Being ill without medical insurance or living in a country with no subsidized healthcare can set anyone back financially by a lot of amounts. Hence it becomes extremely worthwhile to take care of your health at all costs so that no such situation arises. Having medical insurance or something similar according to your local available options is a great way to prepare for any short of health misfortune.