Money management is an essential skill, and sometimes it’s not really about how much you make, but how well you manage your finances.
There are many people who earn good money, but have nothing to show for it, and there are those who have lesser income but live a well-planned life; there is no trick to this; it’s all about money management
If you are guilty of any of these signs below, then you have poor money management.
1. YOU DON’T PLAN YOUR MONEY
Spending money without planning is the first sign you don’t have a good money management skill. Planning and budgeting should be an asset to you; you ought to know how you spend your money and where your money is going.
You should know how much you make and have a plan on how to spend that money, else you’d end up spending your money carelessly.
2. YOU DON’T SAVE FOR EMERGENCY
Emergencies and unplanned situations are a regular occurrence in life; it isn’t something you can probably plan against. So, the best bet is to have an emergency saving fund for those situations, else they’d take you by surprise and leave you clueless.
3. NOT SAVING
Savings is important, very important indeed. A certain percentage of your income should be saved; when your income is used only on expenditure, then your money management is terrible, to say the least.
4. BUYING EVERYTHING YOU SEE
Being able to differentiate between your needs and your wants and knowing when to and when not to spend on your want is an art of money management — and this is where many people lose their money. Your wants are so many, and they can make you buy just everything you desire. Impulse spending is a major reason people go broke, and if you spend your money this way, you have poor money management.
5. SPENDING TO IMPRESS
Of course you don’t need anyone to tell you that spending money just to impress someone is spending money the wrong way. Spend according to what you need and what you can; if you have the thoughts of impressing someone, you’d most definitely spend your money foolishly.
6. YOU SPEND ALL THAT YOU EARN
Spending all you earn and more than you earn is a simple sign that your money management is zero. Spending all that you earn or more money than you make point to the fact that you are spending your money wrongly and your finance is doomed. When the repercussions of your actions catch up with you, there will be no hiding place.
7. YOU DON’T KNOW WHERE YOUR MONEY IS GOING
If you don’t know where your money is going, it’s because you don’t keep a track of it and you don’t plan your money well. When you plan and budget your money, you would always know where it’s going; but when you live without a plan, you’d never have an idea where your money is going and how to cut down cost.
8. YOU ARE ALWAYS IN DEBT
All these practices above will do one thing to you — they will leave you in debt. Being in debt is the lowest point of poor money management, and it doesn’t come like that — it happens when you don’t manage your money well.
Money management is a skill that should be learned and practiced. You can’t be a successful person when you can’t manage your money.
Jake