5 POWERFUL WAYS TO MANAGE YOUR FINANCES

This article will be all about how to manage your finances. Have you ever earned lots of money and it seems to never be enough? Your salary was increased yet you couldn’t manage your finances well, you have employed the services of many financial advisers yet there is very little or no change. If you cannot manage your finances you can never attain financial freedom.

Financial freedom starts first by managing your finances. In this article, we will answer a lot of questions on financial management, why it’s difficult for people to manage their finances, and the real cause of this financial crisis. Sit tight, let’s ride. Before we talk about how to manage your finances we must give a cogent definition of financial management. Financial Management is defined as a way to structure your finances to suit your needs, it’s defined as a way to live below your income, if you look around you will find out that anyone who ever attained financial freedom learned how to manage their finances, you cannot live above your finances and expect to attain financial freedom.

The reason you are not able to manage your finances is not low salary or income, if you think well you will notice that when you were earning a low income you couldn’t keep up with the expenses, later on, your income was raised and yet you couldn’t keep up with the expenses, this shows us that financial management has more to do with individuality than the money you earn per month or per year. Before you start a business, financial management is something you have to learn, you must learn how to manage your finances, if you don’t know how to manage your finances you cannot attain financial freedom.

Those who reach financial freedom learn how to manage their finances. Some people have gone to university to learn financial management, but few people think that they were born with the trait. The truth is, we all were born empty, meaning that whatever we know today we learned from someone or some people, our perception and understanding of life and wealth comes from our background, friends and the information we input into our system

What Is The Cause Of the Financial Crisis?

Hidden Traits

Many people have linked financial crises too many factors, some link it to a lack of job, others link it to a wicked boss or some even call it fate, the truth is none of this is the cause of the financial crisis, the reason you’re in financial crisis is that you are living an already program life that you don’t know about. Many people changing jobs to keep up with financial needs are solving the symptoms and not the problem. Even if you start earning a million dollars a year you will still be in a financial crisis if you don’t solve the root of the problem.

If you focus on the symptoms of a problem and not the root it will keep reoccurring. Every financial crisis started with the individual. Have you noticed that some people find it very difficult to pay off the debt they owe? Do you know too that most people cannot delay gratification for tomorrow’s resources, these little things are the cause of the financial crisis. Now imagine someone who just got a job of 2000 dollars a month, he works for the first month and made 2000 dollars then he bought an expensive watch of 1500$, this person will live in penury. Understand that in this aspect it is not the money he’s earning that is the issue or the amount he’s earning, the issue is what he associates money with.

Some people are money as an enjoyment opportunity, maybe when growing up they got whatever they want, dad buys them ice cream every day, this set of people subconsciously associate money with spending, this is why no matter how much they earn it can never be enough because they associate money with frivolous, they are not happy until they buy something with that money, you see this set of people can not manage their finances no matter how hard they try, no matter the classes they take, they are busy solving the symptoms and neglecting the root of the problem.

Many of you reading this are in this category, the moment money enters your hand the next thing you are thinking of is how to spend this money and what to spend it on, you will be owing someone but won’t like to pay, no because you don’t have the money but because you just want to spend the money, until you spend that money you will not be happy, this is why when it comes to financial management people should start treating the root of the problem and not the symptoms.

Extravagant Spending

This is another reason some people don’t know how to manage their finances, most times they don’t intend to spend extravagantly but association causes it. Imagine you followed a friend and enter a restaurant, you didn’t ask how much the food cost, there were 5 of you, so after eating they said the food costs a thousand dollars, and you know that the last money in your account is for your kid’s school fees, you watched your friends pay for their foods as though it’s nothing, naturally, you will be tempted to use that last money of yours and pay for yours and sadly many people cannot resist that temptation.

This habit of spending more than one earns has made many celebrities broke, and many businessmen have gone down in business because they spent more than their earning capacities. The truth is you can not manage your finances if you don’t know how to live below your income, it doesn’t matter how many jobs you change or how much you earn you can not live that financial freedom.

Financial Management is one of the things you must learn to avoid business failure. If you don’t learn it your business will fail in the long run. Everyone who desired to be financially independent must learn to live below their means, if you must manage your finances it has to start with you managing how much you spend, no matter what happens, you shouldn’t spend more than you earn if you do it will lead you to debt and in the long run, you will become bankrupt

No Vision And Plans

Some people think in the present, and believe that life is too short to worry about tomorrow. When you see these types of people you will know that their spending habits say it all. To manage your finances you must have visions and goals. How do you save money when you don’t know what to do with it? Vision is what keeps you from spending extravagantly, think of it this way, you have a business you want to build, you are currently working part-time to get money and find this business venture, will you spend extravagantly? The answer is no because you know and you need this money to fund something bigger. Look at the life of anyone that spends extravagantly, they don’t have a vision, they live life in the present, and they believe that the future will think of itself.

You can’t think this way and except you will know how to manage your finances, financial management habit is best cultivated when there’s a vision, a burning desire of what you want to do with that money if you don’t have anything tangible, if you don’t have a vision if you don’t have a plan you can’t learn how to manage your finances no matter how many books you read or how many classes you take, even if you want, let it be from the best university in the world if the cause of a problem is not sorted out the symptoms will just be recurring.

I am not just teaching you how to manage your finances, I am teaching you how to solve the main problem many financial tutors won’t tell you, what I am writing about is the fact I have done several research on. Many people who don’t know how to manage finances do so because there’s no vision, we are governed by two things; pain and pleasure, these two things detect our life and the choices we make.

The reason many people spend immediately when the money comes in is that it gives them pleasure, the pleasure thru derive from it is far better than the pains they perceive from saving. For you to change this and know how to manage your finances you must change the narrative, this means you must make your pleasure your pain and your pain your pleasure. If you must be prudent in your finances you must make saving a habit, at first when your mind is already programmed to associate spending with pleasure it is usually difficult to alter this sequence of operation.

The best way to alter it is to create a vision, and set goals that you want to achieve before the year runs out, such as how much you want to earn next month,6 months, and 1 year. Vision will keep you focused and goals will give you the motivation to keep going. When you can do this successfully you will start saving more, the second thing you have to do is to reward yourself when you hit a specific goal, it will make you happy and you will want to save more. This is the way to break the chain of pain and pleasure to know how to manage your finances

The attitude of the rich toward financial management

This is a very important aspect of this article, for you to be rich you have to study the rich, you don’t take information on how to be rich from a poor man. Likewise, if you want to learn how to manage your finances you must learn from the rich because there’s no rich man who doesn’t know how to manage their finances.

Money is to be spent and invested

This is one of the first attitudes of the rich. The rich earn money to save, invest, and spend but the poor earn to hoard and are afraid of investment. They are scared they will be scammed, and they are afraid to spend the money because they don’t know how to multiply the money. This is why so many men will have a huge sum of money in their bank account but live a life of penury. The reason is that they don’t know how to multiply the money. For you to be able to learn how to manage your finances, you must first clear your mind to understand that money is in abundance, if you think money is scarce you will not even pay those you are owing when you earn your monthly pay. This is why it is important to model the rich in financial management issues

Money is Borrowed For A Tangible Reason

This is the second thing you must learn from the rich when it comes to how to manage your finances. The poor borrow money most times to spend or pay off debt, the question you must ask yourself before you do this is, where will I get the money to pay back? It’s surprising seeing some people borrow to pay off debt or to buy new clothes, the rich don’t do this, the rich borrow to invest, to fund a vision and dreams, and for you to learn how to manage your finances you have to model after the rich. Never borrow to buy liabilities, many people do this, they borrow to buy clothes, shoes, and gadgets while their bank account is empty

Conclusion

We’ve come to the end of this article, we’ve seen how important it is to learn how to manage your finances, if you don’t know how to manage your finances you can’t be financially free no matter how much you earn a month. We have understood that most of the attitude people have toward wealth is inborn, it is controlled by society, or friends and loved ones. Most of us while growing up got whatever we asked for, we subconsciously believe that money has to be spent to derive happiness, we grew up with this mindset and it affected our perception of wealth. I have not only written on how to manage your finances but I have equally written on the real causes of the financial crisis and an effective way to put it to an end. I advise you to go through this article again for you to understand it well and apply it in your personal life. Don’t forget to share with friends.