Managing money is a very important course of life, it is never taught in school. The ability to manage money properly is one great skill that should be acquired for daily living. A lot of people often say that having a regular income is a key way to living a good life but the truth is, either you have a regular income or not, the ability to manage money will be helpful in creating a good plan for the future.
Money is an asset that can either create more assets or create liabilities for you. The way you handle your finance today determines the way you will handle your finance in the future.
Money management is one course that is taught in the real world by people that understands the concept of money. Have you ever thought of how you spend money? Do you get your salary only to realise that it is gone before you even start planning how to spend it? Then you need to understand how to utilise and manage your money.
In understanding about your money and how it flows through your pocket, you need to answer a few questions
- Do you spend most of your income as it comes or do you save most of it?
- Do you buy the things you need or just buy the things you like and things that make you feel important?
- Do you plan before spending your income or you spend it as it comes in?
- Do you take time to review how you spent money at the end of the day or do you just forget about keeping track of your spending?
- Do you make your money work for you or do you work to keep the money coming always?
If you can sincerely answer this,then you can understand why you have been having a leaking pocket/purse.
If you want to spend money wisely, you need to understand the difference between things that are necessary and things that are luxury. Necessity are things that you need on basis and they often do not change in price. E.g rent, food, utility bills e.t.c. Luxury are things you do to certisfy your wants and urges. E.g going to the cinema,buying expensive wristwatch and luxury car.
The ability to differentiate between luxury and necessity is the beginning of money management.