$ Happy Rich Year $

If you are setting goals for the new year, make sure to include some money-related objectives in there. Why? Because shortage of money is tough to live by and, when you have the chance to do so, I would recommend taking steps to ensure you are able to have a small fund to access in the future – whether you are looking forward to getting something special or avoiding the financial stress of a rainy day. Also, growing debt or bad spending decisions can really catch up to become a distressing financial position that can only be blamed on oneself.

Personally, my goal is to save up to invest in a business and have some savings to live with when I take that step. I am a student of accounting and finance but the knowledge needed for practical decisions in personal finance is completely different; I want to learn how to make my money work for me. I want to customize spending and saving strategies to my needs and make sure I am ready for the fine print surprises of real life money management.

Here are the ideas I am pursuing to become more money savvy:

  • I have three famous books to start with and see what new tips I learn: Rich Dad Poor Dad by Robert Kiyosaki, The Millionaire Next Door by Thomas J. Stanley, and The Wealthy Barber by David Chilton.
  • Buy or rent? We all need a place to live and few decisions in life will be as expensive as this one. With house prices rising and salaries not quite growing at the same rate, it is getting more difficult to save up for a down payment. But, do it little by little. Paying rent throws away a lot of money that would otherwise be invested in growing ownership on a property. When I bought a place, I did a detailed analysis of rent vs. buy numbers and comparisons between the return on the down payment vs. the return to be received from other investment options for the same funds. I went into a lot of detail to build this model and I am currently trying to build a simpler version of it to teach and share.
  • If you have extra money set aside, make it work for you. Find some good investments. Check with an advisor but it is also critical to do your own homework on the products. Understand the risks that you feel comfortable taking.
  • Balance your lifestyle between satisfaction and spending reasonably. It is also mentally healthy to not be dependent on material possessions for happiness. Tune into that childhood when you got Christmas presents and all you ended up doing was playing with the box the gift came in. Happiness and satisfaction can still be that simple and economical to attain.
  • Build a reasonable budget and follow it. Allocate money for all the regular stuff and special allowances for big items or treats like vacations. Then, stick to it as much as possible. You can even reward yourself with a little present or a nice meal out for succeeding.
  • Go DIY and you can save a lot of money plus enjoy some resulting lifestyle improvements. The top tip here would be to make your own meals and limit eating out to once a week. I have also been trying experiments in frugal living and it is a lot of fun to have these projects which definitely save money but also time in the long run. My latest effort was to make a simple cleaning solution: it was cheap, smelled wonderful, and left less surface streaks. Win win!
  • Become a sales shopper! On average, most products are hardly worth their full price value. When buying clothes, furniture and other non-basic items, do some bargain hunting. For some people, that activity can be quite exciting. A lot of places and credit cards offer loyalty or usage rewards and some of those opportunities are well worth looking into.
  • Credit cards are so handy and I do use mine all the time. But pay it off fully and on time. If you are going to borrow money, this is not the right source for it. If credit card use pushes your spending out of control, stop using it or keep a low spending limit as a control.
  • I know some people who really splurge on themselves but would not spend a penny on others. Seeing these habits makes me a little sad. Find a better balance, you are not funding a charity but be a little generous; a little time and investment can go a long way to show you care.
  • I had Get a Raise on my goals. Sometimes, it’s that simple: you need more money and you just have to ask for it.

How is your relationship with money? When it comes to money management what are your wins and strategies and where do you let the purse strings lose? For me, it is food. Share your thoughts, perspectives, and advice.

Image: http://financialmoneytips.com/tips-on-effective-money-management/


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s