Whether you do all the work yourself or hire a professional, there are some basic money principles to be adhered to. It is also necessary to have answers to the following questions. What do you know about money? Do you understand money? Do you have a philosophy about how you use money? Experts say many people have little understanding about money; consequently, their finances are never in order regardless of how much money they have. Below are simple money rules that you need to know. Differentiate between needs and wants Many people end up spending their fortunes on things they do not need. According to experts, everything that people really need revolves around food, shelter and clothing. They stress that a key aspect of financial planning is the ability to differentiate between needs and wants. Unfortunately, they say many people fail to do so. While it is true that in today’s world many items, besides the basic needs, are necessary, the decision to have your house fitted with classic paintings by great artists at great expense definitely falls under wants. And there are many more examples like that. Even when people go for their needs, their decision is often informed by their want. For instance, while you need a bed to sleep in, you do not need one that has gold engravings or fittings all over. Many people spend money that way, on the things they want, believing that they are getting things they need and this can be a costly mistake because it amounts to money going to waste. To spend money wisely, always distinguish between needs and wants then go for the needs and ignore the wants. Do not spend all your earnings While this is self-explanatory, many people find it impossible to spend less than they earn. But for you to keep your finances in order and to avoid getting into debt or running out of cash before the next pay day, if you do not spend all that you earn each month, you will have some cash to either pay off your debts or save. Now, the benefits of having some form of savings are numerous. Savings can allow you to invest, resolve emergencies and ease the financial pressure you feel when you run out of cash before your next earnings. Of course, the economic situation in the country has left some people with barely enough to feed, but many people have risen above such a challenge by adopting drastic savings tips. (Click to read more)
Posted on: Mon, 25 Nov 2013 02:42:59 +0000
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