How to Have Money: Simple Money Management Tips Everyone Should Know
Money Management Tips for Everyone...
I just got paid at work today. The figure I see when I look at my account balance would make just about anyone cry. However, I don't cry, because the money has been put to good use.
You see, a few years back, I had really bad money management habits and my money was always spent before the month even went halfway, leaving me broke and managing to get by on whatever little amount was left.
This happened until I stumbled upon Robert Kiyosaki's book Rich Dad, Poor Dad and a few other financial and money management books. The money management tips I learnt from these books have changed my life a lot.
Now, every time I get money (either as salary or income earned online and offline), I make sure I put these money management tips to work. I have seen the tremendous, positive changes they have brought my way.
Here are the Money Management Tips That Have Worked for Me Over the Years
1. Readjust Your Money Beliefs and Habits
Whatever money habits you have right now were learnt over the years. If these aren't currently working for you and you would like to see positive changes in your finances, you would need to unlearn these habits and pick up the right ones.
"You can't pour new wine into an old wineskin..."
Purge out, completely, every one of those habits so you have room for ones that work.
2. Spend Less Than You Earn/Receive
Now that you have a blank slate to learn new financial tips, we can proceed in learning these money management tips. The first of them is to spend a lot less than you earn.
This tip may seem simple, too simple in fact, but it is one one the most powerful money tips you will ever come across.
Most people spend way more than they earn in an effort to appear wealthy or impress people and consequently, they sink into debt and penury.
You will never get to a point in your finances where you can live comfortably if you always blow all of your earnings and then some.
3. Prioritize and Do Away with All That's Not Absolutely Necessary
You'd be amazed at how many things you don't really need but constantly purchase if you did an analysis.
Developing good money management tips starts with knowing what's important and what's not and choosing right.
More Money Management Tips...
4. Put Whatever is Not Spent to Good Use
Here's a money formula I came up with that works just fine for me:
My earnings = upkeep + miscellaneous + savings +investment + tithe
Whenever I get an income, I split it into five unequal parts: a tenth of it goes as my tithe and the rest is split into four parts apiece:
- One piece serves as my upkeep
- One piece as my savings
- One is kept to be invested
- And the last is my "miscellaneous"
At the end of each month, if I find I didn't spent all the money in the miscellaneous column, I split it in two and one part goes into my savings while the other remains.
This formula will work for you if you adopt it or you might want to tweak it to your taste. Whatever you do decide, you should come up with a plan that conveniently caters to your needs, some of your wants, and still leaves something tangible for your savings.
5. Let Your Money Work for You
There's hard work and then there's smart work. Having your money work to bring in more money is smart work and everyone should look into this.
As earlier said, one fifth of my earning goes into my investment column and each month without fail, I said this out to my investor who picks out good investments for me.
I started quite small investing a $100 each month (that's about N20,000), but this money has grown at a compound interest over the years and now its worth a tidy little sum of money.
6. Build Passive Income
Passive income is income you get over and over again from an effort done once.
Most times, you wouldn't even be required to service or maintain these streams for them to keep earning.
Passive income streams can make you financially comfortable, rich even, especially if you have a few set up in place.
These are a few passive income streams you can set up:
- Write ebooks and self publish on sites like Amazon Kindle Direct Publishing (KDP), Lulu, Kobo Books, Scribe, Draft2Digital, and Okadabooks.
- Get a YouTube channel, amass subscribers, publish videos and monetize your YouTube channel.
- Create and upload creative designs on Teesprings
- Create a blog, get traffic and monetize.
- Invest in real estate.
- Buy stock
- Create an online course
- Buy into a business as a silent partner
- Create a mobile app and monetize it
- Create a WordPress theme
- Create paid premium WordPress plugins
- Set up a few small businesses and have others run it.
- Take high resolution pictures, upload to sites and earn royalties from each download.
- Sign up for mobile car adverts if you cover a high mileage daily.
- Offer to wear branded t-shirts of companies if you attend a lot of business functions.
Passive income is a great way to build financial prosperity, but it does take a while to build to that level where you start earning a good sum.
However, it's important to note that nothing worthwhile ever comes easy. These money management tips, when practiced consistently, will bring you out of debt and definitely make you attain financial freedom.