Since the start of time when humans know how to interact with the rest of other beings, they must and should know how to manage their belongings or things wisely. Later on, as time goes, money was invented and properties were documented to ensure ownership of things. This is personal finances. To survive, man has to know the proper way of managing it, otherwise he will end up being broke and a liability to society.
Unknowingly, some people are not aware that finances have to be managed. They are just focused on two basic things, and that is to spend and to save. Basically, saving and spending are already the fundamentals of managing personal finances. It is just that, for some they do not take it seriously.
Want VERSUS Need
One of the ways to manage your finances well is to identify the things that you need and the things that you want. Your want and your need are two different things to consider especially in buying something.
The “need” thing is something that classifying an item or product that you need to buy for survival. In other words, your life is dependent on it. Without that item that you “need” to buy, the basic things that need to be fulfilled first before anything else will be compromised. These items generally attaches to the very basic need of man like food and shelter.
On the other hand, the “want” things are those that your very existence to survive in this world is not compromised if you could not buy these items that you “want”.
When you go to a store and you see some items, products or services that you feel you are really going to buy, ask yourself first. Will my very existence be jeopardized if I am not going to buy this? Would I still be okay if I will not purchase this product?
It is very important to know and differentiate your “needs” and ”want”. If you just want to buy that thing, then better not to, otherwise you would just be spending something on things that are not important. But if you feel that you really need to buy it, then better get it if your purse can still afford. You can ask the help of tree house loan if you really insist on buying your want.
TEN PERCENT OF YOUR INCOME
Some Christians saved ten percent of their income for church tithes. But bet you, this also holds true in managing your personal finances.
Saving ten percent of your income for future emergency needs goes a long way for you to survive and probably get rich someday. Anyhow, it is really a must that we have to save something. That 10 percent is not bad enough. It is just that you have to discipline yourself.
Other financial experts say that when your savings is already equivalent to four times of your monthly income, then that is the time to use your extra savings you have in investing on some business.
Managing your personal finances wisely is just easy as one two three. What is just hard is on how to start it and make it a habit. Balancing your spending and savings equals good personal financial management. Managing your personal finances as told above is basically a tip on how you could survive in this world full of ironies and surprises.
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