Sound Money Management, Saving and Expenses
No one is born with money management skills. However, we are required to manage our finances effectively. Few people are taught 
how to manage money. Lack of sound money management skills usually exposes people to frustrations, anger, shame, and disappointment. Sound money management is like playing an instrument or driving a car. It requires one to learn the skills. It is never too late to start learning money management skills. It comes with immediate benefits. People who can manage their money responsibly are not faced with usual emotions of anger, frustrations, guilt, and shame. They have a peace of mind since they can pay their expenses, pay their debts promptly and keep the debts at a manageable level. Furthermore, someone who has money management skills can save extra cash to make their life enjoyable.
Sound money management refers to the process of overseeing an organization or individual cash usage. It involves budgeting, spending, savings and investing. Budgeting refers to the development or creation of a plan on how to spend the money. The creation of a budget or spending plan enables you to know in advance whether the money available is enough to do the things you need. Budgeting allows you to balance income with the expenses. The income and the expenses should balance to ensure that you do not spend more than you earn. Budgeting allows you to prioritize your spending by focusing on the things which are most important.
Savings simply means the portion of income not spent on current expenditures. Many people are not aware of what they expect in the future. Savings help you to meet future emergencies or events. Savings are necessary since you can avoid large financial burdens you may experience in the future. Savings allows you to become financially secure. Savings does not depend on how much you earn or make. People earning little salaries or wages can learn how to save by placing their money in a piggy bank or coffee tins. An individual should learn to save 5% to 20% of their net income every month. For short-term savings piggy bank or coffee tins are appropriate. However, long-term savers should opt for secure methods such as depository institutions. Long-term saving allows you to plan for retirement and overcome future inflation. Long-term saving also allows you to plan for future investment in fixed assets. In this case, you can realize the value of your savings in the future in terms of the profits made. To realize sound savings you should create a savings plan. The plan should be measurable, sustainable and consistent. You should determine the amount to save and automate the savings. The savings plan should allow you to achieve the desired life goals after a particular duration.
Proper money management requires you to identify the most important thing. This forms the basis upon which you decide what you want to do with the money. It is essential to write what you think is important. The list would help you to determine goals for your money. You have the power to design the goals accordingly. Your goals can either be long-term or short-term. Clear goals will help you develop your savings plan and monitor on your expenditure. Realistic goals will allow you to think of the amount you need to save and for how long.
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