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Written by: Raymond Fohjem

How to manage your money

How to manage your money

Many people spend so much money on items they believe are useful just to later see that these items were unnecessary. Others spend their whole paycheck within few days.

From the above illustration, you will realize that earning more money won't change a person's life or make him rich if he does not know how to manage his income.

Why do some people become rich?

Do you think rich people make their millions overnight? Do you think only specific people were born to be rich? No! They are just people like you and i who managed to control their spending habit and investing their balance wisely.

There is no magic in becoming rich if you don't learn how to manage your spending habit. This is why rich people will prefer to go for a medium size purchase when they know they can afford the biggest one.

How to manage your money

Today i will tell you some of the mistakes that people usually do along the line that make them fail at the end. I will also explain all you need to know in order to manage your money especially if you possess a credit card.

  • Compare prices. You must learn how to compare prices before making a purchase. For instance if you want to buy an item, won't it be wise to visit the other competitors and see their own samples, quality and prices? By doing so, you stand a better chance to buy the right item at the best price.
  • Nothing in excess: If you came across any rich man, ask him how he manages to became rich, he will start by saying "I never buy unnecessary items." Back to you, how does that reflect to you? When going for shopping make a list that states just what you need according to importance. By implementing this habit you will not only gain control over your spending habit but you will one day become rich.
  • Live below your level: People have different reasons for managing money. Among these reasons, the main aim to the majority of people is to have enough to face their future challenges ahead and the hope to one day become rich as successful people have been doing. If you earn a monthly salary, you should try to see that not all is spent. If you know you can afford to rent a big house, instead go for a medium size. When you know you can buy a big car, go for a normal one. Just like that.
  • Be specific. If you are among those who spend their whole paycheck in just few days, therefore it will be meaningful to do something before you start involving in debt. In such a case if you want to go out, take just the appropriate amount that will be ok for you and your friend if you are supposed to go with friend(s). The rest amount goes directly to your bank account or investment. Same steps apply when you want to pay your bills.

In order to be rich, you must follow the example of successful people. What I mentioned above are the ways that successful people managed to control their money.

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