How to Manage your Money

Money pictureThe lack of money causes a lot of problems for the person, family, and the whole Society. The problems vary from merely inability to pay few bills to daily anxiety and worry which may lead to more complex problems related to the relationship between spouses and a negative effect on their children.

Without money, will be impossible for the family to provide for its basic needs such as food, shelter, clothing, and so on

Knowing the negative effect of not having money or enough money to meet our basic needs, should motivate us to do what we should do to learn how to manage our money wisely to prevent any unexpected events which may hurt us financially, mentally, and physically.

Managing money wisely consists in the two following parts:

A- Managing Income
B- Managing Expenses

Managing Income

The good method of managing income is to secure a good source of income which may provide all of your needs and your family needs in addition to the ability to save money for the future too.

How to make a good Income

Making a good income consists of the following basics:

1- Having a good education

2- Improving your knowledge and experiences constantly

3- Being positive and creative in your job

4- Being very valuable to the Company you are working for

5- Have a second, and possible a third source of income

6- Invest your saving wisely to earn money on your money

7- Have your own business

8- Think, create, invent

9- Write books about things you know, which might be interesting to others

Managing Expenses

It is not enough to make a good income to be secured financially, but to save a good portion of the income to meet any unexpected events which might happen.

To save money we have to spend less than we earn, this means we have to manage our expenses very wisely and to spend only what we really need despite how large is our income.

Basic Rules for Spending Money:

1- Have a specific monthly budget for all needed expenses

2- Shop for the best prices and good quality items

3- Buy what you need, not what you want

4- Follow your mind and your budget, not your desires

5- Keep your used car as long as it is working

6- If you need a car, buy a good used car, instead of new

7- Cook and eat at home, to save a lot of money

8- Never borrow money unless you want to buy a house

9- Use your credit card as cash, and pay the full balance monthly

10- Save at least a total of 12 months income in your saving account, not to be touched

11- Eat healthy and exercise to stay healthy and to reduce your medical cost

By managing our finances wisely, we will feel relaxed, happy, without being worry about what might happen in case we lose our job suddenly. This can be done by having a self discipline and determination to live happy and secured financially.