Learning How to Manage Your Money

You do not need a lot of money to improve your finances, you need money management skills. Well, having a lot of money of course makes everything easy for you but if you have money management skills, even a moderate level of income can ensure your financial safety. If you are not satisfied with your income and if your income falls short, you need to build your secondary income. There are a lot of ways to do it, and the easiest thing is to use your existing resources and skills. There is a difference between learning skills to manage your money and learning skills to generate income. Just because you have learned high paying skills and are earning high income doe snot mean your finances will be on track. You also need skills to manage your money. Let's say you learned programming and you start making a lot of money. Will your income ensure that you have better finances if you do not know how to manage your money. You need money management skills to create financial future.

Why You Need Financial Intelligence

Do you know what you need to be financially successful? Well, you might say you need a high paying job, successful business or winning products to make money for you and help you become financial successful. Sure, these things can help you become financially successful, but what do you actually need to get a high paying job, successful business, or winning product? You might say skills. Yes, you need skills, but do you realize skills are not enough. You need financial intelligence.

Financial intelligence is the ability to control cash flow. Sadly, this is not taught in schools and colleges. They teach you about tax and most of the money you earn in your life will be spent paying tax.

Financial intelligence will help you differentiate between assets and liabilities. You buy a car, it is not an asset, you spend money on gas. But if you buy a taxi cab it is an asset.

You might earn a lot of money but if you cannot control cash flow, you will become a broke in 2 years.

3 Habits That Will Make You Poor

You might have born poor but you have the capacity to die rich. Sadly, a lot of people are doing things that are making them poorer.

Saving Money in Banks: When you save money in banks, the value of your money will go down due to inflation. You also get meagre return which otherwise would have given better return when you have invested.

Buying Liabilities: If you buy a house to live in, you are buying liabilities, if you are buying cars, you are buying liabilities. You will have to spend money to maintain your house or car. However, if you buy a house that you can rent out or buy a car that you can rent out to uber, you are buying assets.

Working for Earned Income: Do you know job holders are the highest tax payers, they pay a lot of taxes on their payroll? Instead of working or earned income, try working for capital gains or passive income, which have lower tax rates.

How Much Should You Have in Your Emergency Funds

A lot of people have a lot of different opinions on this subject. Some say you need to save at least 4 months of your monthly expenses in your emergency. If your monthly expense is $1000, based on this theory, you need to save $4000 on your emergency funds. However, some people say, you need to save 6 months of expenses or even 12 months of expenses. If you have multiple sources of income, you might not have to save a lot of money in your emergency funds as money is coming through multiple channels. Likewise, if you have passive income, small emergency fund can be okay.

How to Build Your Knowledge on Finance

If your parents do not have debt, if your parents have savings, if your parents have investment portfolios, if your parents have assets, they have successfully managed their finances. If your parents have managed their finances successfully, they are the best teachers you can learn from. You can also enrol for finance, business, investment, or economics class in your high school to build your knowledge. There are a lot of books than can enrich your knowledge on finance, you can read these books. Watching interviews of personal finance coaches can also substantially help. You can also enrol for a short term course to build knowledge.

What is the best personal finance rule?

I use the of 50/30/20 rule. This personal finance rule says that you allocate 50 percent of your income for essentials like rent, grocery and bills, 30 percent for things you want, a new t-shirt for instance, and use the remaining 20 percent for savings and investments. With this rule, you not only pay for your necessities but also enjoy some luxuries while still saving for the future. This is my favourite personal finance rule. When you follow this rule, you don't have to sacrifice everything for a secure financial future. You'll have enough to invest because you're saving 20 percent consistently.

Debt Management: Options for Getting Out of Debt When You Do Not Have Money

If you're struggling with debt and lack funds for repayment, here are some options to consider, but remember not all methods can work for everyone.

Borrow from friends and family: Seek financial assistance from friends and family where you do not have to pay interest.

Sell your assets: Liquidate properties, houses, land, cars, or gold to generate funds for debt repayment.

Work hard to make money: Increase your income through hard work and allocate those earnings to pay off your debt. Work over time to generate additional income.

Prioritizing debt repayment is crucial for every individual, outstanding is bad for personal finance.

Money and Investment Quotes to Motivate You to Make More Money

Great men have said great things. These great words motivate us, inspire us, and even help us to succeed in life. Here are a few money and investment quotes I find really inspiring.

Time is more value than money. You can get more money, but you cannot get more time – Jim Rohn (American entrepreneur, author and motivational speaker)

This quote basically means you shouldn’t waste your time because every second is important. Therefore, you need to utilize your time properly so that you can prosper in your life.

Too many people spend money they earned...to buy things they don't want...to impress people that they don't like – Will Rogers (American actor and social commentator)

I guess everyone can associate with this quote. If you want to become financially successful you need to stop spending money on things you desire, you only should be spending on things you actually need.

You must gain control over your money or the lack of it will forever control you –Dave Ramsey (Personal finance coach)

Controlling your money means managing your cash flow. A lot of people are in financial crisis because they don’t know how to manage their money.

An investment in knowledge pays the best interest – Benjamin Franklin (American statesman, writer)

This quote by Benjamin Franklin is my favourite.