How These 7 Tips to Money Management Will Increase Your Net Worth
These 7 tips to money management will get your finances started in the right direction. The earlier you start, the better off your finances will be, now and in the future. Start with understanding that you and only you are the manager of your money and assets. And you can learn great money management skills now. The sooner you understand that the better off you will be.
I will start by telling you what management is and how to learn money management. I will tell you why money was invented, then go on to tell you, why save money is important as a term, now more than ever. Lastly, I’ll answer the question; Is money the root of all evil? Which is taught by many parents and grandparents. All these factors are included in my most important tips for money management.
Many broke people don’t know they are broke. Why? They live on the edge of financial disaster. They are desperately in need of my tips to money management I am about to expose. Many broke people overspend and don’t manage their money. That’s one reason for low net worth happens to the best of people. The more you carefully manage your money the higher your net worth will be in the long term.
Money management is not complicated, but it does take some work. Being broke does not necessarily come from the lack of money but instead, from the lack of money management skills. Some misdirected people think they are managing their money, only later to find they are just moving it around without a clarified management system in place.
TIPS TO MONEY MANAGEMENT
Your best tips to money management skills starts early in life. If your first money manager, who is a parent or guardian has poor sills, you can still learn. There are many other mentors and teachers who will come along and can teach you. Others in your path can also help you by giving you their own tips to money management. If you find yourself without any help, these 7 tips to money management here will get you on the right path.
TIP 1: Organize. The first thing you must do is organize, prioritize, and set strict limits on spending any and everything, no matter what your income. An example for strict limits is, if you choose to buy a car, buy it as though you make half your actual take-home income. The same goes with your home.
Poor money managers have a history of leaving caution to the wind. It is imperative that you don’t. If you are not willing to organize, prioritize and set limits on spending your net worth will take a slow and gradual tumble over time. Worst yet, your net worth may never evolve at all.
TIP 2: Mindset. Develop a mindset that you can learn to manage money. In fact, not only can you manage your own money, but absolutely no one cares about your money as you do. This is probably the greatest of the tips to manage money.
Some high-income individuals tell themselves they are so busy making money, they don’t have time to manage it. You do, and if you don’t make time, the results may be devastating. High-income individuals have been scammed by family members, so-called advisors, and friends who in many cases were well-meaning. Low-income and moderate-income people can also manage their own money to increase their net worth.
Your best tips to money management starts early in life-Lois
TRACKING AND PLANNING FINANCES
TIP 3: Tracking and Planning Finances Is Important. For busy people, the easiest and fastest way to track your spending, saving, and investing is with spreadsheets. You can create spreadsheets in google docs or even a simple word document. Do not do anything you don’t know or understand. Research and plan before you shop for big products.
Some high-income individuals and low to moderate individuals allow family members, friends, or salespeople to steer them into complicated investments they do not understand. Because of this people have lost billions over time.
Money in the right places will produce the right assets and a high net worth in the long run. No one can steer you in the wrong direction if you have learned the right money management skills. An example is someone who makes 20 dollars an hour but ends up with 1 million dollars in a 401k plan. It’s because they added to it consistently for 30 years, and it was matched by their employer. It can even grow to 2 million with the right investments in the plan. Investing in it is imperative, the match is not.
WHAT MANAGEMENT IS; AS A STANDALONE CONCEPT
TIP 4: Dictionary Definition of management: The process of dealing with or controlling things or people. What money management is: The process of dealing with the way you spend, save, and invest your money. Understanding what money management is, should be your biggest tip to money management.
My personal definition of what money management is: The constant analysis and documentation of everything you spend, save, and invest. Keeping your spending to everything you need and some of what you want within financial constraints
WHEN MONEY WAS INVENTED
TIP 5: When money was invented, what was its leading purpose? Many who are deep in debt or have big money issues don’t understand what the original purpose of money was when money was invented. It was not invented as a tool for waste.
In my humble opinion, when money was invented, the purpose was to specifically trade it for necessary goods. The tender or money had a value based on the use of the goods and services. People who constantly go broke, no matter what their income, don’t understand how to place the right value on goods and services.
The problem today is too many people are misusing money’s original purpose to acquire too many goods that have no necessary purpose. The waste leads to poverty over time, when there are illnesses, disabilities, aging, or loss of income, they find there is no money. With proper money management early in life and consistently poverty can be avoided.
IS MONEY THE ROOT OF ALL EVIL?
TIP 6: Is money the root of all evil? No. I heard this a lot growing up. On one hand, I see parents spoiling their kids, on the other, they teach them to hate money. How many times did I hear that money is the root of all evil? I would be rich if I were paid a dollar each time?
Money is not the root of all evil, it is the mismanagement of money that is the root of all evil. That is why there are people who have small incomes but have a large outcome at retirement. And there are those who have a large income early on and almost no money in retirement.
If you ask them, they can’t tell you where it went. If you try to explain several tips to money management to your friends and they tell you, money is the root of all evil. Explain to your friend’s money management is the root to a better life, no matter what your income.
WHY SAVE MONEY IS IMPORTANT TERMINOLOGY
TIP 7: Why save money is important as a term is because savings are power. When it comes to buying groceries and paying utilities or bigger things like buying a home, car, college, or saving for retirement. If you can get a great car for $10,000 rather than a similar car for $20,000. You just made $10,000, and that extra money can be added to savings over time. Use that formula for everything you do.
The concept is simple. Do an analysis before you spend for anything. Ask yourself, what does this mean? If you don’t understand it, don’t do it. If you haven’t read a contract for an expensive item, don’t buy it.
For example, say someone tells you, you can save on solar panels. How do you find out?
Well, it is complicated. Many solar companies do what is called a bait and switch. They tell you one thing in person; then they’ll ask you to sign a lengthy contract that says another. Some solar customers find themselves unknowingly paying $50,000 to save $10 a month on an electric bill.
Before purchase, they were told it will be $20,000 with a $15,000 tax credit. Only to find out the tax credit was much smaller, and they are still paying the same utility bills they had before the solar panels. The only difference is a huge monthly bill on solar panels.
What’s worse is the people who sign solar leases, a 30-year solar lease means there is a 30-year lien on your property. Google solar nightmares. Remember, you still have to pay a gas utility and water utility.
An important part of money management is not just spending but saving and investing the right way. When you understand, why save money is important terminology –it will become easy.
A crucial part of money management is saving money because most people lose their valuable net worth when they have no money for savings and emergencies. Another way to lose net worth is overspending for necessary items. See, you may not always have good times, you may not always have an income. Fast forward, now you have savings as a cushion. Also, you won’t always be able to work, this is where retirement savings comes in.
SUMMARY OF TIPS TO MONEY MANAGEMENT
I have demonstrated how to increase your net worth with 7 tips to money management. I explained when money was invented it had a purpose. Also, what is management? and how does it relate to money management using the same concept. I also answered the question, Is money the root of all evil? And explained that it is the lack of money management instead.
I explained the 7 tips to money management, and that all 7 together will increase your net worth. The most important is the importance of understanding how you can organize, prioritize, and analyze everything before you buy. You will eventually understand the right way to spend, save, and invest.
Yes, I always try to be careful with my money. You have great tips here.
I need to try some of these tips. Having more money for the future is good.
This are all such great pieces of advise! Especially for people (like me!) who aren’t very finance savvy. Thanks so much for sharing!
It can feel overwhelming managing money. But you definitely have to be in the right mindset to be disciplined!
It is good to practice purposeful spending. I like to try to be thoughtful when deciding what to buy and determining if I actually need it or not.
I am still learning a lot of new and interesting things about money. Thanks for sharing and explaining these seven tips!
I’ll definitely try one, I’ve not seen these much tips to manage money to increase net worth.
Great tips, being able to retain funds certainly would increase your net worth!
This is great advice. i don’t consider investments unless they are ones I am well infromed about and understand very well.
Such great advice! Saving money from an early age is such a great idea. Also, we should be mindful of where we are spending and investing in our hard-earned money!
These are great tips! I will definitely make sure to use them. Thanks for sharing!
Thanks for using my tips.
These are all really great and very helpful tips! Thanks for sharing this very informative post
I don’t earn a ton of money but my motto is to pay the bills first and if there is anything left then we can go do something or I can purchase items that I need to replace. I’m not perfect but this is what I strive to do and teach my son too.
We always track our spending. It’s important. Thank you for the tips!
These are great practical tips. I agree with you that tracking and planning is important. I personally use spreadsheets.
And yes, learning how to save is equally important too as it serves as our safety net for emergencies.