The biggest mistake people make in terms of building wealth is that they spend most of their time and energy in earning money. But it is important to know that without learning how to spend money judiciously and how to smartly save and invest money, no one can build a favourable and promising future for themselves or their family. Money is important for everyone – be it for transactions that fulfill/satisfy our needs or be it building wealth for future needs. “CONTROL’ is the ultimate mantra for managing money. Sound money management comes down to how well you control your money.
Managing your money sounds simple but it isn’t always so easy. There are two things that make money management difficult. One of them being our constant greed to earn more creating pressure on ourselves to have more. Another reason being the endless options when it comes to financial decisions and money management creating a dilemma of what to choose, where to invest, how much to invest, etc. Following are some tips and tricks that will help you manage your money better.
- Budget – Many people skip creating a budget as they think it is time consuming and tiresome. Budget is a great way to never run out of money and save enough to attain life goals. A typical budget includes a list of income and expenses that is determined for the future. A person with a budget will be in a good position to manage cash flow and make provisions for future expenses. One must define their financial goals before starting to make a budget. This will give them a clear idea of how much disposable income do they have and how it can be grown and managed.
- Save Money – It is important to save first and spend later. Once the budget is set and you have an approximate idea of your disposable income, try and save that money as far as possible. Try cutting off unnecessary expenses like going out for parties, eating in restaurants, watching a movie at the theatre, etc. One must save their money in the present so you can enjoy it in the future.
- Clear Debts – It is advisable to clear all bill payments and other payments on time. Avoid piling up expenses. Uncleared payments will only get piled up and it will become difficult to clear such a big amount at once.
- Limit your credit card purchases – Credit cards are considered to be a person’s worst enemy. When a person runs out of cash they immediately reach out for their credit cards. One must avoid expenses that they can’t afford. One must avoid expenses on such items, especially if it is not needed at the moment.
- Start Investing – As people say, you are never too young to start investing. Start investing as early as possible. Choose the right investment plans according to your financial goals. Investments are the best way to grow the assets that you already own.
- Save for emergencies – Emergency situations are unpredictable. It is important that we save for such situations too.
- Open a savings account – The best and easiest way to earn interest on your money is to open a savings account in a bank. For example, if you’re in Nigeria, you can open a savings account in GTBank. These banking institutes invest your money on your behalf and provide you with a percentage of interest on that amount.