Planning and Managing your Money
Planning for your money is an important aspect in ensuring your have full control over your resources.
Planning wisely can break the difference between being rich or poor, staying within your means or extravagant, being in debt or being debt free.
Unless you are one of the billionaires who can afford paying for any vacation you may need, pay for any medical expenses you may incur, pay for education expenses in any higher institution of your choice, have no worry in retring costs and savings, have a huge stream of income that any wasteful spending cannnot erode, then financial planning should be a must and not a choice for you.
The basics of money managemement is understanding your earns and expenditure and then evaluating whether your spending it within your means. That means it all starts from knowing your income or salary and expenditure.
Perhaps you have heard this phrase "to live within your means" - it generally means that you do not spend more than you can afford.
We will discuss more about living wuthin your means in the proceeding pages.
Now, as earlier stated, money management is based on income and the expenditure. If one spends more than his/her income that is probably a bad money management strategy and if one spends less than he/she earns, that is good spending.
Ideologically, one may wonder how one can spend more than the earnings, but it is true that many individuals or families spend more than they earn. This is possible and is facilitated by credit cards purchases, loans, deferred payments, recurring payments, etc. All these are good, but first understanding your revenues and your spending is key in limiting and staying within your means.
The basic financial question to ask yourself is - are you spending more than you earn? if yes, then you need to seriously consider seriously starting to plan for your finances. If not, then you need to determine the percentage or the amount of money left after your spending and to stick to your csutomized plan of spending and saving.