October 12, 2007

How to manage your money

by Curtis M. King 12.OCT.07

In today’s complex world, driven by rapid consumerism and constantly changing prices, survival demands skilful personal management. Realizing your potential and helping others to do the same, however, requires that your personal management skills are inclusive of the ability to manage your finances successfully.{{more}}

People generally do not keep track of their personal income and expenses. Some just abhor managing money, while others are simply afraid of what close inspection may reveal about their money management skills.

There is, however, no advantage to be gained by being ignorant about your finances. On the contrary, successful management of your money indicates that you are very responsible and that you are on your way to living a better life.

Success at managing your money includes careful budgeting, regular savings, prudent management of your debt, investing wisely and planning for your retirement.

A key element in exercising control over your finances and coping in today’s world is the careful preparation of your personal budget. Of course, preparation of a budget does not guarantee that it will be attained. However, the absence of one may well render your situation worse.

It is important that you make regular savings and avoid spending on luxurious or unnecessary items. There are many institutions, including the credit unions, that provide safe and convenient places to save. Moreover, regular savings ensure that you are in a position to meet emergencies. Remember the old adage that says: “Smart persons put aside some savings for rainy days.”

In addition to “rainy days”, most people have some level of debt. Some have mortgages, others, car loans, credit cards, hire purchase management, and many others. It is very important that you manage your debt prudently. Avoid using your credit card arbitrarily. Remember, always avoid purchases which you cannot afford.

Wise investments are a sure way to earning extra finances. There are many instruments that you can explore- land purchase, term deposits, bonds, mutual funds and shares in successful financial institutions, among others.

Finally, it is crucial that you commence planning as early as you possibly can. Too many persons wait until retirement is close before planning for the same. In today’s world, that is a most foolish decision. There are many retirement packages available. Find out about these and start your plan now, if you have not yet done so.

If you employ these simple tips, you will be on your way to managing your money wisely and making better efforts at life’s chances.

• Submitted in support of Financial Literacy Month by the SVUT Cooperative Credit Union.