Your financial well-being rest on how efficiently you manage your money. One of my cousin, 30 years of age, came to me few days back. He wanted help to get him out from huge debt he has piled up through credit cards. On asking, he narrated how increase in his salary due to frequent job changes built aspirations for a higher lifestyle for which he relied on credit cards.. A job loss last year forced him to default on his payments and in last few days he has utilized all his savings to pay off his bills. But it was not enough and now he has accumulated huge outstanding which he is unable to pay now.
This situation is not unique. In fact most of the youngsters who land up a good job in the start of their career go for major credit buying without realizing the pros and cons if situation like above arises. A result of poor money management, most of them then search for professionals to help them out.
What this incident highlight is the importance of Money Management for one’s financial well-being. It starts at the childhood while receiving pocket money from the parents/grandparents. The spending or saving habits developed at that age goes a long way in managing finances when the child grows and start working. For the same reason many parents now focus on developing money management skills right from the childhood.
Here are some tips on how to manage your money better and work towards achieving your life goals:
Set up a budget as soon as you start earning. Awareness on how much is going out from your pocket Vis a Vis how much you are earning helps you in controlling unnecessary expenses which you may not need today. Clothing’s, movies, eating out, coffee day, etc. are some of the expenses which hit your savings if you go overboard. This budgeting will help you in keeping track of such expenses and meeting your ends with your savings.
Be careful with credit especially in early years of your career.It always increase impulsive buying. The interest you pay on repayment can cause problems later in your life if you lose track. Hence, when you want to borrow, do it only when you are sure you can repay and if taken, pay your debts promptly, otherwise visit creditfix.co.uk/debt-solutions/trust-deed/.
I have always been advising to my friend’s relatives and clients-Pay Yourself First, meaning, put a little money into savings. A small amount of money also grows over time. Look ways to save money on a regular basis- take student loans for cheaper rates, buy on credit carefully, use employer benefits like passes to the maximum, use car pool or public transport if journey is long, buy used text books, avoid late night parties etc. Remember, you have short, medium and long term goals to meet. All the savings you do help you in meeting your goals.
Always maintains a fund which can be helpful during emergencies like job loss or medical. If you have to rely on your savings it can drag you few years behind and you have to put a lot of stress on yourself to regain the same position. A 6- 8 months savings work well during such scenarios.
The above steps do not require any text book reading or a coaching class. These are basic money management tools which even a layman can follow. Remember, saving habits that you develop at early stage of your life go far ahead in meeting your life goals. If your money management is good the path to your destination will be far easier and enjoyable.
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