As a public speaker and basic skill developer one of the questions I get to answer almost in every of my business sessions is "how do I manage my finances"?
So I thought I'd share a little tip with this community and help someone get on the right track of financial management.
Improving your personal financial situation, how do you do that?
In this post I'll share with you how to get rid of your debts, start building a fortune and simply rely no more on getting paid at the end of each month.
Why do I need to manage my finances effectively?
Why is it important to be financially stable? What does that even mean?
Just few thoughts that might come to mind once you start thinking of money and how to manage it.
The answers to these thoughts are quite easy to come up with, if you put your mind to it. Being able to manage your finances in an effective and responsible way is important for anyone and everyone.
Of course it also helps to understand what money is, exactly. Whether you are trying to make ends meet, as a parent on social welfare or you are an entrepreneur, if you lack the rules of personal financial management and how to apply them, quite soon you are destined to run into serious financial crisis.
How to manage your money effectively?
Managing your financial situation effectively is to a large extent a matter of finding balances. Firstly, the balance between long term and short term. If, for example, you continuously spend above your means(spending more money than you make), your life may be fantastic and enjoyable right now, but you will most
definitely hit a brick wall somewhere in the future. This works both ways: it might not be the best idea in the world to save all your money for later, thereby denying yourself the fun in the present time. After all, who knows if there will even be a ‘later’ for you to enjoy…
Once you have figured out your personal perfect balance between your short and long term finances, it's now time to move to the next balance: the one between how much you spend and how much you earn . This has to be equivalent to your long/short term perspective, because how much you spend now will significantly determine how your life looks today, while the difference between your income and your spending creates the basis for your financial future.
Can I really do this effective money management thing?
From the above explanation, managing your personal finances is about balancing mostly. Balancing now with later and balancing income with spending. It doesn't really matter whether or not you have lots of money, the principles of money will always remain the same. Of course most things becomes easier if you have plenty of money, but in the nearest future everyone will have to find the right balance. If that balance is not there then, you either have to
spend less or increase your source of income.
"money can’t buy you happiness” most people will say. Although there definitely is some truth in that, there is also a lot to be said for the opposite. Money itself probably does not guarantee happiness, but a lack of money (or failure to manage it effectively) will most certainly block, or at least limit, you on your path to happiness.
Once you have found the perfect balance between now and later and between income and spending, as we discussed earlier , you will find that having these balances in your life brings you peace. Simply because you do not need to worry about your future so much any more.
In Conclusion
Improve your personal finance today, it will not only guarantee you a good life right now, it also guarantees that you can do or have things later on in your life. Things that maybe you never thought possible!
Success is attainable!
I believe in you!