Top Tips to make you a whiz at personal financial management
Financial management means more than just being able to pay your bills on time; it means you can build the life you want. Here are 5 personal financial management tips that will get you going.
Tip #1 – There are no shortcuts or magic secrets
There are no secret methods to making money or managing money. Anyone that tells you that, or tries to sell you a secret to success has discovered that one of the best known secrets is that people don’t want to work for the life they want if it means they have to be disciplined and are denied things in the present. Good financial management begins with practicing moderation and restraint. You earn money, put it toward what you need and save toward the future. There is no magic formula or secret way to get around the years it takes to build financial security.
Tip #2 – Your expectations determine your wealth
What do you want out of life and where did those expectations come from? A lot of the time we become determined that we have specific likes and dislikes, as well as goals and expectations – but they aren’t really ours. They may still be our parents, or maybe they come from watching celebrity reality TV. Learn to make your own choices and make the ones that match the life you lead now, and the life you are moving toward. While the idea of the luxury laden lifestyle or the palatial home may sound good, it may not be what you really want.
Tip #3 – Look at what you really want
What do you really want and need in your life that has to be paid for? Even peace and serenity comes with the price tag of being able to afford to be somewhere or to temporarily tune out from the rest of life. Look at what you are spending your money on and be brutal about eliminating costs that don’t support the real you.
Tip #4 – Let your bank statements tell you what you value
Look through your bank and credit card statements and note what you really pay for on a monthly or weekly basis. This is going to tell you what your real priorities have been over the past few months. If you don’t like what you see, cut your expenses and start putting your money where it really counts. You would be surprised at how much money you will save if you change from stopping for a coffee on the way to work every day to having one small dinner out with friends in a week.
Tip #5 – Always put something aside
The last tip is the most important when it comes to financial management. You can’t grow unless you have capital to do so. Capital is created, not by earning it, but by saving it. Too often windfalls or gifts are treated like they don’t count and spend on things you really don’t need. Set a percentage that you must save from every incoming source of money and you will find yourself on solid ground fast.