Money Management Tips

Just like all life skills, learning how to manage money takes a lot of practice and the later we start, the harder some lessons are to learn and the tougher the consequences.

Money Management Tips
Image by ProPhotos from Pixabay

We all know that we should eat well, exercise, get more sleep, and take vacations to recharge. But life tends to take ahold of us, and we don’t prioritize those things.

Did you know that the average kid laughs 300-500 times a day, the average adult only 15 times? Laughter is good for us all. So, let's begin with some tips to put a smile back on your face in your financial freedom.

We all have a limited amount of money to buy the things we need and want. You need to make choices about how you spend your money.

There is a big difference between things you need and things you want. Recognizing between needs and wants helps us to avoid impulse purchase or be more discerning when we must cut back on expenses. Discouraging your child from buying things he don't need and explaining that it’ll keep them from reaching their other goals sooner or that if they save that money instead, they could afford something even better they’ll actually use when they will need it. Everybody need to learn on their mistakes for the better future. 

In this new digital age companies are tempting us with “buy now” offers at every virtual checkout. It’s becoming increasingly easy to spend in the moment and deal with it later, so it’s important to be strengthening that resistance in children while they’re young. A good motto to live by is to spend on things you need and save for things you want.

It’s important to save money for a “rainy day”. While a “rainy day” for a kid looks more like not affording a toy, we adults know the consequences of not having money set aside for emergencies can be really distressing. The rule of thumb for adults is to have at least 4-8 months of living expenses set aside for emergencies. The amount varies depending on income, types of emergencies that might arise for you, net worth and your essential monthly expenses, the lower your income certainty and net worth or the higher your expenses and potential risks, the more you should have set aside.

Having a financial plan is simply knowing what you want, what it costs and what you need to earn, save, invest or borrow to make your goal a reality, with budget planning calculator you can start your journey to financial freedom.
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