Before you start reading my blog, I want to make it clear that I am not a professional financial advisor. Views expressed here are purely based on my experiential learning and observations.
We can broadly classify people into three categories:
One who earn more and spend less, second whose earnings and spending are nearly equal and third whose spending are more than earnings. This is irrespective of your amount of earning because winning at money is eighty percent behavior and twenty percent head knowledge. If you fall in second or third category you may be facing financial crisis very often. Our income does not increase in proportion to our expenses. Either we should learn to manage money or the lack of it will manage us.
If you are in a tough financial spot right now, remember to control what you CAN control. Make a budget, cut spending that isn’t necessary and don’t add debt to the equation. People generally take debt for big house and fancy car but don’t let pride keep you in debt. Big house and fancy cars aren’t worth a life time of bondage. People also spend recklessly through credit cards on purchasing things without a plan. In this situation emotions dictate your spending. One should remember ‘ If you can’t pay cash, you can’t afford it’. The idea is to be frugal as much as you can.
If you fall in first category, try to save and invest your money. As a first step, create an emergency fund for yourself which should be equal to your six months’ expenditure. An emergency fund converts a crisis in to inconvenience.
Money always speaks ‘If you save me today, I will save you tomorrow.’
Money will not make you happy but it will pay for your lunches, vacations, dinner, car, medical bill, children’s fee and much more.
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