Last updated on September 21, 2021
The phrase ‘health is wealth’ is an ambiguous one. As an individual, it’s vital to have your personal and mental health in good shape. But what do you make of your financial health? How often do you think of that savings target you failed to hit last year?
Financial health is a significant factor in managing your livelihood. You might be nowhere near Forbes’ rich people in the U.S, but your life is likely to be much easier with a personal financial culture. If you’re struggling with money management issues, these tips could help you regain control of your wallet.
Make a long-term effort.
Money management, just like every type of management, requires consistent efforts to move from one level to another. Businesses act on decisions, and informed ones, for that matter. This is why business managers put themselves through hours of short courses to ramp up the commitment and the right headspace for big decisions.
Similarly, managing your money could use some ethics and principles from professional business management. You need to make it easier for money to be managed and harder for your cravings to ruin your finances. There are several ways to improve your financial culture. Quite frankly, many of them would require years of experience to determine what works and what doesn’t. Rightly so, it’s a journey.
However, giving yourself some financial education is the best investment for this journey. Only the basics are enough to get you up to speed with the tools and processes required to manage your money. You may check YouTube videos for some expert advice or sign up for financial education platforms.
Money management is only efficient if you know your way around things. Without basic financial knowledge, you may pour tons of dollars into an investment without being able to determine whether there has been growth. This is why you need to make that personal commitment. Plus, you could be easily ripped off.
Try to have a budget and stick to it.
A budget is an estimation of your revenue and expenses. Budgets are a great way to outline your financial needs, prioritize spending, and monitor your financial health. Usually, when talking about budgets, many people tend to visualize complex documents and calculations, which requires banking industry expertise.
Well, albeit that’s true, there are several kinds of budgets. A budget statement for a group of U.S billionaires with several accounts to be managed is likely to be complex compared to a personal one. However, they all apply the same basics. If it’s your first time considering a personal budget, it might be a great idea to check out several templates and guides from Wealth Rocket.
Remember to save before you spend.
The majority of people are likely to max out their salaries before thinking about savings. You may have set a savings target in the past year only to remember it when you’re making resolutions for the New Year. For individuals to save efficiently, the tithe approach might be beneficial. This is how it works: Review your needs and determine the amount to save. It doesn’t necessarily have to be huge. You’re not in competition with China’s richest man. Relax. You only need to set an amount you’ll be comfortable with, say eight percent.
No matter what, you need to ensure that 8% of your salary hits your savings account. It pays to be as religious with savings as believers are with tithes. If that might be too hard, consider a deduction at source arrangement with your bank. That way, your savings are automatically deducted whenever your salary hits the account.
Plan big purchases in advance.
It’s everyone’s dream life to transfer a dozen bucks to an auto dealership for that Wraith. Unfortunately, that’s not how money management works, even for Bill Gates. Whether or not your money is enough to feed the world, it’s helpful to review prices and comparison-shop.
Generally, efficiency is a KPI in management, and it applies to money management, too. A penny saved on that Wraith is still good business. Therefore, you’ll be a great money manager if you plan out the purchase considering all available options.
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