Clearing misconceptions about money management

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There are some common misconceptions about money management, which sometimes may discourage people from exploring how they take control of their finances.For example, money management may be associated with tightening expenses and living on less.

could This could be a common experience for many who are trying to learn how to save this, but people who manage their money efficiently may be able to feel the benefits of money management in the ability to make the best out of their money in the long run. Even those who initially have to tighten their belts eventually will be able to accomplish more of their financial goals.

Good money management

1.  Identify what’s deterring you
2.  Set a goal or two to start
3.  Learn the basics
4.  Have support from your family or spouse

Another common misconception is that you need to be good with numbers or an expert in economics to figure out your investments, bank agreements and financing offers. And if you’re not, then you need to hire a financial adviser. Again, that is not true. Even people who always dread math and don’t keep up with business news can still make sound financial decisions if they ask the right questions. In many cases, they don’t have to retain a financial adviser.

What drives many of these misconceptions is the lack of experience and motivation to jump into a new habit that may seem initially intimidating. Money management may sound like a big undertaking, if you’re not confident and comfortable with the idea. But, in reality, many of the procedures and actions are not any different from the typical due diligence and research you do in your daily life. All you need is to apply some of these skills to your financial routines.

Here are a few pointers to get you started on managing your money.

Specify the goals

You may want more savings, less debt or more discretional income. Any or all of these is good, but it is important that you pick the one or two goals that are most relevant to your situation — simply because you will not be able to achieve everything at once.

Meanwhile, if you pick one major goal and focus your efforts on achieving it, you’re more likely to do that successfully. When you select a goal, make sure that you’re focusing on the most pressing issue for your financial health. For example, if you’re struggling with credit card debt, begin your efforts with the determination to take all steps needed to pay off this credit card debt down, before moving to other goals such as creating more money for luxuries.

Learn about budgeting

That is not to say you need to go back to school. All you need is to download a software, use a spreadsheet or even a notepad to track your expenses and income. The positive aspect about using technology is that is prompts you to take action and provides many features that make your life easier. But not all available money-management software may be adaptable with your bank, so you must check first. In addition, if technology doesn’t fit nicely in your comfort zone, you better go with a more traditional solution that you actually get to use.

Budgeting can be easy if you continue to learn about it, and you keep tabs on how your money is moving. With experience, you will be able to update and refine your budget on the go, which is not time- or effort-consuming.

Overcome the obstacles

Find out why you have been unable to focus on efficient money management. It could be that you dread the exercise, you may be concerned about having to have a serious discussion with a spouse about money, or any other reason. Once you specify the obstacle, you can develop a plan to overcome it. Soliciting the support and buy-in for other family members is a good idea because money decisions are typically shared.

If your obstacles are more in terms of available time, you can overcome his by making sure that you invest in a software or at least an electronic document that can be easily updated and tracked. The more effort and time you put upfront, the more likely you will be able to commit to your plans in the long run.

The writer, a former Gulf News Business Features Editor, is a Seattle-based editor.


Last modified on Wednesday, 31 August 2016 16:54
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