Personal Money Management: Key to Successful Planning

Money: It’s what makes the world go around. When there’s less of it it is a problem when there’s more of it too we have problems of how to manage it. The word money and problems are two sides of the same coin. It would be nice if we never had to worry about money but that isn’t realistic now, is it? You cannot altogether do away with money problems but a few simple tips can help you in your personal money management journey. With these tips on mind you can reduce your debt and maybe even start saving something for the future. So without wasting anymore time let’s take a look at what we can do in our personal money management journey.

Personal Money Management-Set Your Financial Goals: 

Without any goals we are directionless. Without knowing where you’re going how do you begin your journey. You can set any goals, say for example going on a world tour, or sending your kid to college or maybe even the possibility of retiring early. Setting these goals will decide the course of your personal money management journey. Let’s say you want to own your own home, you have to start moving in that direction with your finances. This means saving what you have left over after essentials. There will also be less money then, for frivolous stuff like that new phone that you don’t really need.

The other side of not having any goals means that you’re basically rudderless. In more practical terms you may buy things you don’t really need ending up in debts and not really saving anything. While this may not harm you at present it will bite you… (You know where) later on in life.

How to set goals in Personal Money Management: 

• Separate your long term goals form your short term goals

• Keep both separate

• Long term goals such as buying your own home, retiring early or taking a world tour

• Short term goals such as paying off your debts, buying only things that are required

• Decide which is the most important, in other words prioritize

Now you got your goals set out a plan of action: 

After you’ve set your goals the next step in your personal money management journey is to set a course of action. This entails setting out a monthly budget where you match your receipts with your essential payments. Note the word essential payments here. This will help you in not only meeting your monthly expenditures but in also paying off your debts. Once your debts are paid off you may actually have something to save. Thus begins the road to attaining your goals.

Of course with this step, you need to prioritize too. Start paying off things that are absolutely urgent or thing that takes up a huge chunk of your salary. Say for example you have a loan that needs paying off. Keep that as your priority. By doing so you can reduce your interest payments as well as installments.

Knowing your goal will also help you in saving. If you want to buy a house you need to know which investment route will get you to that goal the fastest.

The most important of all – Stick To Your Plan of personal money management!