Money makes the world go round. It is an asset that is extremely important and can be considered the most vital element for sustained financial security. It is quite easy to make money but extremely tough to manage it. And the more money that a person makes the tougher that its management gets.
Right from saving to investing, it is important to choose the right schemes to avail maximum benefit for your money's worth. You cannot play with your money and need to make the right choices for yourself.
So to help you make those vital choices, I have started the money month series where I will put forth money saving, investment, and retirement planning ideas over my youtube podcast patreon and this blog, that will help you direct your money into all the right avenues. There will be individual posts that dedicated to each of these topics and you will know exactly what to do with your money, once you are done with the series.
What Is Money Management? Why Is It Important?
First and foremost, I thank you for supporting my content be it you watch my videos, listen to my podcasts, read my blog or all of the above. Hopefully, I will serve the purpose of educating you on the topics of money management and all things Alchemy.
Money, as we know, is an important part of life. You need money to carry out your day to day functions and it will be very difficult for you to survive if you don't have money to spend. You need to think about your future and make the best investments for it to grow in value.
In this first Money Month Blog series, we will look at what money management is all about, and how you can manage your money and why it is important to manage it.
Managing Money
Managing money refers to accounting for your incomes and expenses and looking at how much you can save in a day, month or year. Everybody in this world will have an income, which can be active or passive, and expenses, which will have to be taken care of. The excess money that remains will account for the person's savings. How wisely the person saves and invests the spare money (savings) will help determine his or her money managing efficiency.
Money management should be viewed as an extremely important part of life. You cannot take it lightly and need to pay keen attention to it. Having a foolproof plan is important and will help in making management simple. Let us look at some techniques that you can employ to manage your money.
Techniques
Here are some of the best techniques that you can employ to manage your money.
Budgeting
One of the best ways to manage your money is by making use of a budget. A budget is meant to help in planning and understanding how you will use the money that you have. It is a tool that you can use to plan out your incomes and expenses, and figure out how you will save money in a month. Anybody can prepare a budget and there is nothing difficult about it. Preparing one is quite simple and we will look at this topic in detail in a future blog in this money series.
Pen and Journal
The next best way is to walk around with a pen and journal to keep track or your money. For this, you should have a set budget in mind and remain within limits. Every time that you spend money, you make a note of it and maintain a record. You must not forget to mention any spending that you undertake and can also settle for a digital diary if it is cumbersome to carry a pen and journal around. You can make it easier by having a set format and ready and simply filling the amounts.
Prioritize
The next money management technique is to make a list of all the most important things you need to spend money on and ONLY THOSE ITEMS. That way, you will know exactly how much you need to spend a month. You can eliminate all unnecessary items from your "to buy" list and only spend on the absolute necessities. What you are ultimately left with is your savings. In order to prioritize, you can rank your items on a scale of 1 to 10 and buy products and services that have the highest value and do away with the lowest ones.
Be sure to stay abreast with us as we continue the Money Month Series and dive into part two of Money Management.
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