Money Management is a skill everyone should have.
Everyone has some money at his/her disposal at some point in time. Whether it was enough for what was required is a completely different issue. For most people, the heart of the matter is how to handle money.
Mismanagement is the bane of a majority of folks and it is the reason they remain poor. Making money is not enough. It is better when it is well-managed. Finance Management skills are a must today as we run our finances against the tide of persistent inflation and economic depression.
The following are steps to managing your money and increasing it:
Get active and productive. You must have a means of income.
INCREASE YOUR EARNING POWER
Move beyond where you are. Get innovative, develop skills, take a course, do anything that will give you a competitive edge and cause you to be paid much more than you currently earn.
SPEND LESS THAN YOU EARN
You cannot build wealth by spending all (or more than you spend – which is deadly). Choose to defy Parkinson’s Second Law, “Expenditures rise to meet income.”
HAVE A BUDGET
Allocate income to meet needs. Spend on the basis of importance, not urgency. Take the time to prepare a budget (of income and expenditure) – and stick to it.
SAVE PART OF YOUR INCOME
Put aside at least 10% of your income (20% is suggested) in a savings or fixed deposit account. You make the money, let this be yours – the rest can be spent settling issues.
Keeping your money in the bank is the least you can do. Why? You actually lose money as the inflation rate is usually higher than the interest rate. Consult an expert and get advice on the best instruments (stocks, bonds, real state etc) and businesses (start-up companies, expanding companies, network marketing) to invest in.
START A BUSINESS
Better than an investor is an entrepreneur. You have truly arrived when you begin to provide employment for others. Starting, and growing, a business is a good way of leveraging resources and taking advantage of a wide range of fiscal and tax incentives.
It is never too late to start.
Start today! Start managing your money right.
John Chidi is a Motivational Speaker, a Life coach, and a Pastor.