The art of mastering efficient personal money management is an essential tool to financial freedom. Before exploring how to handle money, it seems worthwhile to make sure we know what money is in our society. To the average person, money is what he or she never has enough of.
Money- to the economist it’s a medium of exchange; to accountants it’s a unit of value; to children it’s a penny; to millionaires it’s a measure of success; to paupers it’s only a theory; to politicians it’s a campaign promise; to government planners it’s a tool of management; to bankers it’s the commodity they sell; to workers its what they sweat their life’s blood for; to husband and wife its something to argue about; to ministers of God it’s the “root of all evil.”
Everybody knows what money is, or at least they should. But in reality very few people know everything about money. It’s a fact that, we can’t do much to change the world and its problems, but we really do understand them and have learnt to respond appropriately. People can do things to change their own financial attitudes once they understand what they are.
One thing all people can do-if they want-is mange efficiently. Efficient personal money management is at the heart of any financial plan. The value of money is not in what the money is made of, but in the fact that everyone accepts it. The paper in a $20 bill is worth less than a penny. But people can buy a lot more penny candy with a $20 bill than with a copper penny. Sometimes even valuable materials such as gold cant make the money worth much if people can’t exchange it for what they need.
The average person is concerned with day-to-day money matters, such as budgets, bills, and bank books; college, retirement, and financial security; and stocks, real estate, and savings accounts. That’s what money means to the average person, and that’s why money matters!
Setting financial goals is exciting; it serves as an opportunity to decide what we truly want to do with our money, and to achieve those goals without having to borrow for them. There are three basic goal types: short-term (achievable under a year), mid-term (achievable in two to five years), and long-term (achievable in five plus years).
If people have multiple goals, they may choose to work towards them all at once, or concentrate on one and then move to the next. It is very important to calculate the amount needed. For short and mid-term goals, the calculation for how much an individual will need to set aside each month is simple: the cost divided by the number of months he/she will need to save.
SOURCE:
http://personalbudgeting.suite101.com/article.cfm/mastering-the-art-of-personal-money-management
Money- to the economist it’s a medium of exchange; to accountants it’s a unit of value; to children it’s a penny; to millionaires it’s a measure of success; to paupers it’s only a theory; to politicians it’s a campaign promise; to government planners it’s a tool of management; to bankers it’s the commodity they sell; to workers its what they sweat their life’s blood for; to husband and wife its something to argue about; to ministers of God it’s the “root of all evil.”
Everybody knows what money is, or at least they should. But in reality very few people know everything about money. It’s a fact that, we can’t do much to change the world and its problems, but we really do understand them and have learnt to respond appropriately. People can do things to change their own financial attitudes once they understand what they are.
One thing all people can do-if they want-is mange efficiently. Efficient personal money management is at the heart of any financial plan. The value of money is not in what the money is made of, but in the fact that everyone accepts it. The paper in a $20 bill is worth less than a penny. But people can buy a lot more penny candy with a $20 bill than with a copper penny. Sometimes even valuable materials such as gold cant make the money worth much if people can’t exchange it for what they need.
The average person is concerned with day-to-day money matters, such as budgets, bills, and bank books; college, retirement, and financial security; and stocks, real estate, and savings accounts. That’s what money means to the average person, and that’s why money matters!
Setting financial goals is exciting; it serves as an opportunity to decide what we truly want to do with our money, and to achieve those goals without having to borrow for them. There are three basic goal types: short-term (achievable under a year), mid-term (achievable in two to five years), and long-term (achievable in five plus years).
If people have multiple goals, they may choose to work towards them all at once, or concentrate on one and then move to the next. It is very important to calculate the amount needed. For short and mid-term goals, the calculation for how much an individual will need to set aside each month is simple: the cost divided by the number of months he/she will need to save.
SOURCE:
http://personalbudgeting.suite101.com/article.cfm/mastering-the-art-of-personal-money-management
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