What Are Money Problems?
Money problems are common to all. There are two broad categories of money problems; the problem of “not enough money” and the problem of “too much money”. The latter is shared by the affluent, while the former by the poor.
Oh well; if you have always been complaining about “not enough money”, then you know where you currently belong. That’s okay. Alright. It’s good you know.
Now, I want to help you solve this menace; maybe not all (as this article will not cover all), but the most prominent underlying cause to why you still have this problem… NOT ENOUGH MONEY, and subsequently, other problems attached to it.
Poor Money Management
Ohh, this got you right? I know. Money is like a tool. If poorly-managed or misused, it would stop working for you. There is the proper “HOW” to manage money. Do you spend more than you earn? Do you regularly buy things that you don’t need? Do you spend without a budget? Do you spend all your money on liabilities, instead of investing it into assets? Do you LACK a financial plan? Are you clueless about how to make your money work for you? If YES to any of these questions…. then…. your are a POOR Money Manager! LEARN how to Manage your Money the right way.
You need to know how to manage your money wisely! Before I move on to practical steps that you could take, here are few basic things to note about money management.
- Firstly, you need the proper mindset.
- Secondly, you need a mentor.
- Thirdly, you need a financial plan.
Practical Steps to managing your money wisely
Here are few steps you should take in this journey;
Many people ignore the aspect of budgeting. Simply put, budgeting means plan how you will spend before you spend. Let me guess, you are thinking, “this is tough” right. Yeah, being broke is tougher. Budgeting helps to present your financial situation clearly and transparently. It helps you know that you can’t afford a sports car for now but you can afford a carrot (humour intended). By budgeting, you will be able to decide where to channel your money and how much of it should be channelled.
Understand Your Expenses
Most people hardly keep track of their average monthly expenses. Hence, they can hardly tell or identify money leakages (i.e. how you lose money). Keep track of all your expenditures. Note down all your purchases – variable and fixed. This will help you separate important expenses from unnecessary ones, hence, you can identify ways to reduce your expenses and thereby, save more money.
Deal With Recurrent/Unnecessary Expenses
This is quite simple; it is only a matter of thinking deeply. Look for excesses in your expenses, and cut them off. Remember, don’t spend more than you earn. Block leakages in your pocket by cutting off unnecessary expenses.
Manage Your Debts
Pay off your debts instead of gaining more. Get them under control and get rid of them. Remember that the longer you postpone paying them off, the higher they become as interest accumulates.
Increase Your Income
I’d bet that you have money problems also because you are not making enough income. This means you need to increase your income flow. Get an extra part-time job, or start a side business. Invest in profitable portfolios. Learn high-income skills that would bring in sustainable stipends on the side.
A career person? Improve your employability skills. That way, you can get promotions or secure a higher paying job.
The more money you make, the lesser your money problems.