Managing Your Finances WiselyIf you look at a list of things that man is obsessed with, you’ll see that money features way at the top. It is what moves the world, it is what drives us to succeed, and it is what we sometimes give more importance to than even the air we breathe. So when we take so much trouble to earn money, why is it that we are so careless with it after we possess it? Yes, we squander it on frivolous things, we let ourselves get cheated, and worst of all, we end up spending more than we actually make, little realizing that we are putting ourselves in the horrible position of debt. Part of becoming a responsible adult should involve learning good financial sense as well, so if you’re looking for tips on how to manage your finances better, here are 7 things that make good financial cents:
Neither a borrower nor a lender be:
How much of the money that you’ve lent to friends have you actually been paid back? And how much of the money that you’ve borrowed have you actually given back? It’s not wise to borrow or lend money, especially when it’s with your friends and family members. For one, it ends up spoiling good relationships when you don’t pay back what you’ve borrowed, and for another, you may never get back the money that you lent. Maintain a policy never to borrow or lend money – it’s good financial sense.
A bird in the hand is worth two in the bush:
Never take bigger risks for greater gains; you may end up losing even what you do have. Remember that for any investment to make good financial sense, you need to come out with at least a little more than you put in. So when you take unnecessary risks in the pursuit of large gains, you may lose what you started out with as well.
Make hay while the sun shines:
Or in other words, strike while the iron is hot. Make use of opportunities to make money when they arise. Work hard when you know there are rewards to be gained. And utilize your time productively and efficiently.
A penny saved is a penny earned:
When you get into the habit of saving money every month, you are earning money without doing anything at all. The interest that your money earns, even if a small amount, is better than nothing. Besides, savings are a nest egg for those emergencies that may strike at any time.
Penny wise and pound foolish:
Most of us are guilty of this – we are stingy when it does not matter and spendthrifts when it does. Instead of cutting back on necessities and essentials, you need to avoid those flamboyant expenses like vacations that are out of your league, buying stuff you don’t really need just to keep up with the neighbors, or living a life beyond your means.
A fool and his money are soon parted:
Always remember that there are people who are just waiting to con you out of your money, especially if they know that you are greedy for more without having to work for it. They’re going to try every trick in the book to cheat you, so be very careful when you spend time online. Visit only legitimate websites, do not click on suspicious links, never give out your bank details, and be wary of people who claim you have won lotteries or have been chosen as the financial representative of kings and queens who wish to transfer their funds out of their countries.
Never put off for tomorrow what you can do today:
This is true especially of credit card bills and other payments that are pending. When you defer payments or pay just the minimum balance due on your bills, you have to pay much more by way of interest. So if you cannot pay off your bills, don’t use your credit card to buy stuff.
photo credit: Leo Reynolds
This guest article was written by Adrienne Carlson, who regularly writes on the topic of executive mba programs . Adrienne welcomes your comments and questions at her email address: adrienne.carlson1@gmail.com
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Penny wise and pound foolish is interesting to me because it’s been at the heart of a rather heated debate in the PF community on whether the “big stuff” or the “little stuff” matters, or both.
I agree with most that it’s specific to each person, but as you point out, many of us (my family included) are chasing little deals while making bigger mistakes with purchases that affect much more than a few bucks here or there. Homes, cars, and the like can sometimes feel so overwhelming to buy that we just go with the flow and want to get the process over with, usually to our detriment.
Wojciech Kulicki´s last blog ..How to Write a Great Financial Mission Statement
Stopping spending irrationally is a great way to control your money. Alot of times we are spending to spend. The world and society around us literally is pounding into our heads, more, more, more. “Supersizing” has become a right of passage when eating out or buying anything on the internet because you are bombarded with “so much more” for just $1 extra.
Where it starts should be us defining what “fulfills us”. I did a recent blog past called “WHAT IS ENOUGH?” that helps people define what “enough of stuff” do they really need in life: http://www.thebryanmcdonald.info/what-is-enough/
Once we can define this, I believe controlling our money and our lives becomes much easier and life becomes attaining your higher purpose and not more and more “stuff”
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