Money is central to all our lives. Unfortunately, managing it is also one of the most complicated things we do. We can’t predict the markets, the economy, job security and other factors. While there are financial professionals, we need to take a stand ourselves. We should begin looking at money and how we interact with it in new and more refined ways.
Money depends on planning
Consider when you get your salary, when you get billed and when the time comes for spending. If you’re ignorant about how these intersect, you will punish yourself and hurt your finances.
Creating a calendar of your money’s movements is essential. By knowing where you stand in relation to its flow, you stand a better chance of controlling it. This is also what makes budgeting essential.
Laura Shin, a personal finance expert, notes in Forbes:
“I have come to prefer a simplified method of budgeting that uses [a method where] a certain percentage of your budget is allocated to certain large categories, and weekly allowances to keep you on track.
“This strategy allows you flexibility while also making sure you reach your financial goals and that your spending aligns with your personal values.”
Despite the turbulent nature of money in general, this should not stop us gaining control of it where we can. We should speak to experts, use tools like home loan calculators and anything else allowing us control and knowledge of our finances.
Credit can be prioritised
The overall secret to understanding money is controlling it. Another key area we can control are parts of our loan repayments. While we don’t control the amount owed, we can decide which loan to prioritise.
For example, you may be able to pay off entire short-term loans but still manage a long-term one. You don’t want to your name to be associated with being a bad debtor, because you merely forgot to budget your time and money correctly.
Get what you need, not what you want
We are all tempted by sales and special offers. Whether it’s a new phone or car, we often think because we have the money we should go ahead. But, especially if you’re a business owner, such frivolous spending can be damaging. When it comes to spending, we need some rules to stick to.
A good one is to always believe there’s something better to spend money on. Of course, sticking to this would mean you never spend. The goal isn’t to maintain it dogmatically but use it as a yardstick for your purchasing decisions.
Money doesn’t have to control us and we don’t have to feel overwhelmed by it. We can always do better and the time to start is now.