"Whatever you have, spend less" - Samuel Johnson.
Every day we make decisions about money, which have an effect on our standard of living. Sometimes they are only small ones, not related to the above-mentioned areas of life. Daily you have to make financial decisions on which items to spend your money. You are in effect the managing director of your family's business. Spend more than you get in, your company (business) will soon go broke. Consequently, you have to ensure that you live within your means and balance the household books (weekly or monthly depending on pay-day)... otherwise you will get into financial difficulties.
The more money you are able to save each week or month, the higher will be your ultimate standard of living; although being a miser will not bring happiness. You have to strike a balance in your life between saving and enjoyment (= spending). After all, who wants to get to a comfortable retirement after a lifetime of frugality and no memories? We all know that "penny-pinchers" and "Scrooges" are often the most unhappy people in the world and that it's always better to give than to receive. Is it really, or only for saints?
Your household finances are run just like a business. At the end of each month, how much of what you earn stays in your own pocket? You will probably find, like most people, that you are paying everyone else but yourself: the butcher, baker, candlestick maker and other accounts, like paying off the car repairs and windows broken by the kids (happened last week - "Oh bother!").
Unfortunately we can't do without money. Also, the older we get, the more we normally need. You get used to a certain standard of living and comfort, but as you get older you need far more capital than you thought. We will look at those various life stages we go through, together with our major financial responsibilities.
The main areas that affect us over our lives include:
Of these, retirement planning is probably the most important priority; because we have to spend a significant portion of our life when we don't have any income coming in.
10 Most Common Money Management Mistakes
I believe this is the reason why so many people have a needless struggle with their finances.
From the above we can see that some basic financial knowledge is vital for all people to survive in the financial 'jungle' that is today's world. Gaining financial knowledge takes time, effort and discipline. You are the manager of your finances, so make a plan to reach your financial goals. Then implement it.
Action is the key word.
From Craig Lock's Mad Money Book. He has been involved in the personal finance field for many years and has studied and written extensively on money matters: articles, brochures for financial institutions and books.
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