Whether we accept it or not, money is a life essential. Without money in hand, it is challenging to have a comfortable life. Money brings us many rich experiences of life and gives us opportunities to learn and grow. It enables us to travel. There are millions of people living in poverty across the globe, and money helps us make a difference to these underprivileged people.
Many of us earn money through our jobs or businesses, but if we don’t manage our money well, we end up in loans and are left with little savings. Our entire life goes into living and working for money, and we miss financial freedom. So, it is important to manage our money well. Below are the benefits of managing our money wisely.
Benefits of managing money better:
1. It helps us build a good amount of savings. Savings are very important for old age or when job loss happens suddenly. They are important to buy a better home or to pursue our dreams.
2. It gives us financial freedom. Having the freedom to quit a job when you want to quit is a great luxury in life.
3. It helps us make a positive impact in the world through donations and charity.
4. It reduces the stress and burden of debts. Being free from loans is a great relief.
5. It gives confidence and security in life.
Many people think being rich means earning high salaries, but it is actually about how well you manage your money. What good is it to earn a big salary every month and spend it lavishly with no decent savings and financial security in the long run? Earning big salaries is wonderful but how we manage the money we earn is more important.
Below are some tips for managing our money wisely.
10 simple ways to manage your money better:
1. Be clear about your short-term and long-term goals: Understand what you want to achieve in the short term and long term. What do you want to buy in the next six months? Where do you want to travel? How much savings you want to build in 5 years? Ask these questions and understand how much money is needed for these goals. Understanding these goals clearly will help you budget your money accordingly.
2. Create a budget: Based on your short-term and long-term goals, create a budget and follow it. Your budget may have below components.
- Loans and EMI’s
- Household expenses
- Insurance payments
Having a budget and following it helps you know where your money is going, and it helps you have better control over your money.
3. Save at least 10% of your income: Make it a habit to save at least 10% of your income. If needed, cut down your expenses but follow this rule. When you follow this rule, you create wonderful savings in the long run. Having a good amount of savings in the bank improves confidence and financial security in life. Savings help you achieve your goals in life.
4. Invest: Investing money is a great way to grow your money. So, invest a portion of your income in SIP’s or mutual funds or gold or real estate. Research well before investing and take low to moderate risk. Don’t take high risk unless you are in a position to digest the losses.
5. Don’t fall for quick rich schemes: Every year, millions of people lose their hard-earned money in quick rich schemes which promise high returns of money in less time. It is very tempting to have our money doubled in a few months doing nothing but don’t fall for such schemes because it’s not practical for anyone to achieve such feats. Don’t be gullible and fall for false promises. Do thorough research before you invest your money. Study about the background of the company and try to objectively understand the truth in promises. Stay far from any schemes which promise you too high returns in too little time.
6. Understand your money: Many people don’t spend that time to understand their money. Take time to understand your taxes, investments, savings, earnings, loans, and EMI’s expenses. Educate yourself about money and its various components. When you understand your money better, you will be in a better position to know what is happening. You will be able to manage your money better.
7. Donate money: Many people think charity is an unnecessary expense, but scriptures and saints of all religions highly recommend this because donating money is like sowing seeds of prosperity. Law of nature is it is in giving that we receive. When we want to receive abundance and prosperity in life, we should donate some percentage of our income to charitable purposes every month. So, every month, plan to donate some money out of your income.
8. Identify and minimize unnecessary expenses: Keep track of your expenses. When you track the amount of money you are spending, it helps you identity unwanted expenses. Minimize these unwanted expenses.
9. Take good care of your health: It might be surprising to read this tip here, but taking good care of health comes under managing money wisely because the disease is costly. When a person falls sick, it is not only painful physically, but it also drains away savings and causes job loss. So, take good care of your health. Lead a healthy lifestyle and protect your health. Health is wealth.
10. Have an insurance: We never know what life has in store for us. So, it is better to have health insurance or life insurance and be prepared for the worst. Don’t expect the worst, but be prepared for it. Having insurance helps us and our family members go through tough times of life with better financial security.
These are the ten tips to manage your money wisely.
Remember, money is a great power that can transform life. Respect it. Use it to get financial freedom, to pursue your hobbies and passions, to live a good quality life, and to create a positive impact in the world. Enjoy your money and use it wisely.