GUIDE ON HOW TO MANAGE MONEY
58money management
HOW TO MANAGE MONEY
The economic downturn that started in United States in 2007 has been so severe and has affected so many countries that it has been given a unique name, the Great recession.
What caused it? Newsweek magazine put the answer simply: “A frenzy of irresponsible borrowing”. But why the frenzy to borrow on credit, to buy things for which people are unable to pay?
You will likely agree that the world’s economic system, which cultivates greed, did precisely that.
The massage was, in effect: “Buy! Buy! Buy! Whether you can pay for it or not.
If you are a victim of the Great recession, no doubt you can relate to what author David Beart wrote in an essay: “It seems there as a lot of discussion about the world’s financial problem offered about how to solve these issues”.
This article has been designed to help people struggling with debt. These questions will be considered: What are the benefits of saving? What can you do if you are in debt? How can you learn how to manage your money better.
WHY SHOULD YOU SAVE
It is wise to have money at hand for emergencies. According to wise saying “wisdom is for a protection the same as money is”. But money cannot protect you if you have not saved any.
Have you considered growing some of your own food? Many, including those living in apartments or small houses, have an area they can use for gardening. You may be amazed at how much food a person can grow in a limited amount of soil. Consider further; if you need to have cell phone. Can you use it for emergencies only and pay in advance for a limited amount of calling time? Or if you have a clothes dryer, have you thought about limiting its use? Perhaps you can hang some of your wash or, at times, even all of it on a clothesline. You might also be able to limit your use of air conditioners and heaters. Before switching on of such devices, ask yourself, ‘is the weather really that that extreme? You might also talk to others to learn how they limit the use of electricity.
It is wise to have a savings account. At times, banks and financial institutions fail. So wisely select a bank where your savings are guaranteed by the government in event of bank failure.
HOW TO GET OUT OF DEBT
First; try to pay more than minimum monthly amount required on each bill, card, or other commitment.
Second; concentrate initially on paying the debt that carries the highest interest.
Third; curb your spending habits. This is especially important. Have you been enticed by seductive advertising?
Be modest and realistic about what you buy, and make your decisions carefully. Being a carefree spender can become addictive and can lead to heartache. So work on being a caution and prudent spender, which can put position to enjoy lasting happiness.
HOW TO MANAGE YOUR MONEY
Basically there are three ways to manage money (1) spend it, (2) Save it, (3) Give it away.
If the Great Recession has highlighted nothing else, it has shown the wisdom of living on a well-planned budget. What is budget? Simply put, it is an estimate of how income will be used, whether by an individual, a family, a business, or government.
FAMILY PROJECT
How can you plan a budget? “All family members”, says the book Budgeting, Davis Chambers, could be included in drawing up the plan so that all have to commitment to the family budget”. Periodically, all should get together to see how heir budget is working. Creating a successful budget can become a rewarding family project as each one finds ways to live within the family’s income. To work out a budget, some people use a computer program. Others simply use a pencil and a sheet of paper, which they divide into two columns. One column is for income and the other for expenditures. It is also important to include in the budget a monthly amount to cover one-a- year expenses, such as income tax and perhaps a vacation.
A time-tested method of budgeting is based on the use of envelops or folders labeled “food”, “Rent”, ”Transportation”, ”Electricity”, ”Medical Bills”, and so forth. In the past, people put cash for those expenses in the envelopes each month. Now many feel it is safer and easier to deposit money in a bank account and withdraw it as needed.
THE GREATER HAPPYNESS
Studies show that giving of resources to others including time and energy as well as some money, brings a greater happiness. To the extent your resources allows, it can be the best of the three options mentioned in the introduction.
One of the must valuable and sensible things you can do with your money is give it away. When you think about what matter is given it away. It’s usually relationships, experience, and the sense of making a difference, not money and possession.
When you take it open yourself to help those who are less fortune, that kindness and generosity will come back to you in a variety of positive ways, but most rewarding is the feeling you will experience in your heart by helping your fellow man.
WISE SAYINGS
- A lover of material things will never get satisfied no matter how much he has.
- Those who long to be rich, stumble into temptation.
- Before you embark on any project, first calculate the expenses, to see if you have enough to complete it.
- A borrower is a slave of money lenders.
- If you borrow, make sure you pay back.
- In any thing you are doing, put God in your plan.
There is more happiness in giving than there is in receiving.
No doubt you will agree that it is better to be a cautious saver so as to be able to be a generous giver, than to be a selfish spender.
