Money is the next most important resource after time. A lack of money represents an immense loss of one’s personal freedom since one cannot provide loved one’s the basic necessities that would make every fleeting moment of life enjoyable. Furthermore, a lack of money would also mean your right to movement would be extensively shackled as you cannot have vacations anywhere else in the world but your own backyard. Money is not an infinite resource, and like the seamless flow of a river its flow cannot be barricaded but we can rightly channel it. With shrewd management it can become an invaluable leverage in all our life’s pursuits. Here are 10 important things you should know about money and personal finance.
(1) Always Maintain A Personal Budget.
It is often remarked that when your expenditure exceeds your income, then your upkeep becomes your downfall- that is economic determinism not to put too a fine a point on it. To avoid this bizarre state of affairs,create a personal budget for all of your expenditures as this will help you stay right on top of your spending. It will help you kill that itch to buy the latest junk you never really needed in the first place.
(2) Spend Wisely
Eschew every form of wasteful spending by always asking yourself the question “can I really do without this thing right now?” it’s the litmus test for wasteful spending. Don’t go broke trying to appear rich (you can’t spend yourself into wealth, no, you invest). The rich invest only in things that will become future assets not liabilities. Control your spending or it will control you
(3) Work On Your Money Mindset
Someone once said that the wealthy don’t see money in how little it is, but the value it can bring. The billionaire Warren Buffet was once asked in a TV interview if he would pick a misplaced dollar bill he finds it on the road and guess what his reply was? An emphatic “yes!” Take a cent from a dollar and it wouldn’t be the same amount anymore. That emphasizes the worth of every penny in your possession. No amount is infinitesimal. To quote Benjamin Franklin “watch the pennies and the dollars will take care of themselves”
(4) Invest Early
The majority of the millennial working class of today sell their services for money. They work for money and not the other way round. If you invest your money in good investment opportunities, money will be working for you and in the future you’ll eat of its fruits. They say plant a tree before you ever need it.
(5) Invest Only In What You Understand
If you didn’t know, Ponzi schemes are springing up these days on every street corner. Don’t fall for them. If something is too good to be true, then it’s probably false. If an investment avenue bears a funny name, then you shouldn’t go with it. Don’t go with the flow. Ensure you do your homework before investing. Stay clear of any investment opportunity that isn’t legit. It could be really dangerous.
(6) Diversify Your Investment
Hedge the risk of losing your investments during market downturns by diversifying. That way you won’t feel pained when the market finally takes a serious hit.
(7) Buy Assets That Appreciate
Always think of the value of an asset ten years today. If you have the choice of picking one of a car and a house. Go with the house because the house would give higher returns when you either sell or rent it but the car wouldn’t. Avoid investing in things that depreciate in value down the line. Buying the most expensive mobile phone around should be least on your scale of preference. Why not invest in shares instead.
(8) Say No To Debt
The consequences of running up debts is that you lose your freedom and peace of mind as you could get overtaken by the worry of repaying the debts. You can’t really enjoy that football match in the knowledge that you still owe an outstanding balance on the TV. Each time you accept to buy anything now to pay later, you are simply serving whoever sold you on the idea. Interests will spiral overtime and you’ll have to pay up.
(9) Have A Savings Account
Did you ever you realize you spend less when you handle less cash. Just imagine how it would be when you have all of your hard cash stashed away in some savings account away from your immediate reach. That can help you keep the reins on wasteful spending. Cultivate the habit of saving.
(10) Have A Plan
Planning remains the most effective strategy to personal finance. Draw up a road map for every of your future aspiration and save well in advance. That way you will have less money emergencies in the future. Open up different savings accounts for all of your future pursuits and start saving now. This includes money for vacations abroad, education etc.