Managing money
effectively is a key success skill. Successful people make the decision to
become effective with money, many of them early in life. Like any area of life,
it is important to educate yourself about the threats and challenges in the
world. Taking the time to master a few key principles will pay off for years to
come.You may also like10 strategies to solve family business.
1. They don’t overspend; they live on less
than they make.
Living on less than
you make is an essential money management skill. Some of the worlds wealthiest
people have taken this principle to heart. For example, Sir John Templeton, a
legendary investor who became a billionaire, saved 50% of his income even when
he grew up with limited means. If that is more than you manage, dont worry! You
can reach financial success by saving 10-15% of your income. You may also like 10 strategies to solve family business.
Tip: Learning to live
on less than you earn takes time. Start by looking for ways to save money: 55
Practical Ways To Save Money Efficiently.
2. They don’t fixate on price; they understand
the importance of value.
The price you pay for
an investment, a meal or piece of clothing is only part of the story.
Successful people also think about the value of that good. For investments,
they consider the prospects for the investment growing in the future. For
personal items, they look for high quality products that will last. For
example, a well-made pair of business shoes may cost $200 or more but these
shoes can last for years with proper care.
Tip: Buy high quality
products that will last for a long time.
3. They dont waste cash on fees and interest;
they know how to manage their banking
Carrying a balance on
your credit card is incredibly expensive and sadly common. According to CNN,
the average American household carried over $15,000 in credit card debt.
Successful people also keep an eye on their bank feeshow much they pay for ATM
use and other transactions. These fees are easy to avoid with planning once you
understand how the system works. Simply reviewing your financial accounts for
5-10 minutes each monthis all it takes to understand your fees.
Discover: 7 Essential
Ways To Avoid Unnecessary Bank Charges.
4. They dont forget to adjust their finances
after big changes in life.
Did you get married
recently? Is your spouse referenced in your will? These are some of the points
that financially successful people manage effectively. While you can automate a
great deal of your finances, it is vital to make adjustments when your life and
family circumstances change significantly. Sitting down by yourself (or with a
financial expert) at least once a year to review your life and financial plan
is an excellent way to stay on top of important changes.Also read how to succeed to grow your small business
Learn:Arrange your
finances for the long term with estate planning.
5. They are not satisfied with a stagnant
income; they look for ways to increase their income.
Some people never ask
for more money or simply settle for 1-3% increases. Unfortunately, that rate of
income growth means you are simply standing stillinflation is slowly eating
away at your purchasing power. Instead, successful people look for ways to earn
more income. Increased income gives you more options for personal enjoyment,
more capacity to give money, and a sense of security.
Successful people take
daily action to increase their income. For example, they take a course to
improve their skills or they contribute ideas to improve the productivity of
their companies. They also know how to ask for more money.
6. They dont ignore financial statements.
Reaching financial
success requires some slow and steady habits. That includes forming a habit to
monitor your financial statements. Successful people set a time each month30 to
60minutesto review all of their financial accounts: investments, bank accounts,
credit cards and more. When they detect an error or omission, they take
immediate action.
Tip: Set a recurring
reminder in your calendar each month to review your financial accounts.
7. They dont take foolish risks in money.
Warren Buffet is often
quoted as saying, Rule number one is never lose money. All investments carry
some measure of risk (and therefore the potential to lose money). That said,
successful people use two powerful tools to avoid losses. They understand the
value of insurance to control risk (e.g. home, auto, and life insurance) and
the importance of asset allocation.
Remember:If it sounds
too good to be true (or if you dont understand how it works), slow down and
start asking plenty of questions.
8. They dont pretend to understand everything
when it comes to money.
The world is a vast
and complex placesuccessful people know and deeply understand this truth. When
it comes to money, there is a lot of information out there. Thats why
successful people like Warren Buffet understand their limits and focus on their
strengths.
Tip:Review your
knowledge of money and investments. If you are just starting out, read one or
two classic personal finance books. Or read 9 Cant-Miss Secrets Behind Warren
Buffetts Wealth for more insights from one of the worlds most successful
investors.
9. They dont transfer responsibility to
experts.
Successful people do
seek out the advice of experts, yet they never yield responsibility. For
example, it is reasonable to seek advice from a tax accountant in planning your
financial affairs. However, successful people take the time to ask questions
and evaluate the person providing advice to them.
Tip: When seeking advice
from professionals like accountants and lawyers, ask questions and seek to have
the advice explained to you. Otherwise, it is difficult to act on the advice.
10. They dont let the pursuit of money
overcome other values.
Seeking financial
success is a valid goal. Significant financial resources give you more options
to give to causes you believe in. It also means improved access to technology,
health care and leisure. However, successful people understand that financial
success is only one aspect of a successful life. For example, neglecting health
in the pursuit of money is a poor strategy.
Tip: Review your
personal goals to see if you have a balance between financial goals, career
goals, family goals and other activities.
About the Author
Mussa Msemakweli is a technology entrepreneur, Book writer and digital marketing expert. He is currently C E O at the Africa shared . His work has been featured in a number of publications, including the Maisha halisi Magazine and on Culture trip. If you have a good time follow me on facebook and instagram or leave a comment, Thanks.
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