Have you ever been in a painful situation where you are at a shopping complex and something you’ve always wanted for a long time catches your attention? We can take numerous examples, such as mobile phones, game consoles, clothing, jewellery, accessories, etc.
You name it. Anything. Your eyes gleam at the sight of them but slowly transition into a state of gloom the moment you open your purse or wallet and see little to no money in that. Or you attempt to swipe your card against the card reader, and you hear the beep that no man or woman would want to hear when they shop.
You know it. It’s when your card gets declined due to an insufficient bank balance or even if you do have enough money, you realize that it serves a greater purpose than your material want, and hence, you fight hard to not give in to your temptations and finally decide to turn away, promising yourself that you will own what you desire in a month or few after you receive your next pay check.
Some claim that money buys happiness. And some beg to differ. But I have a different perspective on this, and I sure believe that others out there have the same outlook. And it is that money actually buys the ‘freedom’ for us to be happy. It is the freedom we seek at the earliest age possible so that we can live the rest of our lives in peace, harmony, and good health. It also includes the freedom to buy whatever we want without having to look at the price tag and go through second thoughts, which can be emotionally agonizing.
Now it’s time to get to the important part.
The answer to how you can achieve that freedom. It’s none other than ‘Personal Financial Management.’ This is the key that unlocks your door to financial freedom. In an age where we have millions in disposable income flowing within our economy, personal financial management matters most in ensuring that we leverage them for our happiness, sustenance, and well-being.
Below are a few simple steps on how to manage your finances effectively:
1. Save
The first rule of personal financial management is ‘Save.’ Keep saving as much as you can because you never know when you may need your funds later. Follow a minimalistic approach where you do not keep accumulating things you don’t need. Because sooner or later, you may regret it when you realize you never needed the things you accumulated that just sit around, collecting dust.
2. Invest
The next rule is something that follows the idea of saving. Why would you want to just save when you know something out there can pay you for saving your money? This is where you deposit your money in a savings or investment plan that will add interest to your savings.
3. Track
To save, invest, and spend the way you want, it is very important to first know where’s your money going and how it’s being spent on a daily basis. This will help you eliminate unnecessary expenses and make plans on how much more you could save. You can install a tracker on your mobile phone to make it easier for you to record your incomes and expenses and address any mismatches if they arise.
4. Budget
Prepare your own budget. This method tracks your expenses and draws up plans on how you will spend your money further. A budget will ensure that you develop the habit of saving and investing properly so that you can fulfil your short-term and long-term goals.
5. Multiply
At present, it is not that easy to sustain ourselves with just a single source of income. Sometimes, even two isn’t enough, considering how much living standards have increased these days and how our economy is growing steadily, even despite the pandemic still threatening the health, safety, and livelihoods of people around the world. Adding more income sources is the only sure-fire way to enhance earning capabilities. However, they will require time, patience, hard work, and constant dedication. You can multiply your money by investing in financial instruments such as equity stocks, mutual funds, bonds, commodities, etc. If you own a house, it can also be used to rent it out to people, which will allow you to earn rental income. Also, you can sell your skills in the form of freelancing gigs and earn some extra money from them. The possibilities are vast
.
In conclusion, managing personal finances is not just a skill. Still, it is also a necessity that has to be mastered by all of us. This will ensure that we will always have surplus money to spare, which will come a long way in fulfilling our wants and needs. Also, this will help us plan our future better, increasing our scope for early and peaceful retirement. If you would like to know more about personal financial management and the concept of economic freedom, I would highly recommend you all to read this best-selling book called ‘Rich Dad, Poor Dad’ — by Robert Kiyosaki. This book will teach you how to make your money work for you and the things you can do with your savings to attain financial freedom and enjoy the rest of your lives in peace, happiness, and solitude.
Comentários