Having more money does not mean this solves all financial difficulties. The key is how well the money that flows through is being managed. Yes, money must be managed effectively. Money is a good servant, but a terrible “master.” When someone allows money to master them, there is usually trouble associated with this behavior. Developing strong money management skills allows a person to become effective at managing money, no matter how much money is involved. Most people feel that having lots and lots of money is all they need to be happy and successful. Nothing could be further from the truth. We have heard of people who win the lottery or receive a large inheritance and become bankrupt in a matter of a few years. This all goes back to managing money effectively. Some key points to doing that involves:
- Having a clear picture of how much money comes in monthly;
- Having a budget around that money for all needs related to that income;
- Having an awareness of the importance of setting aside funds into a savings account and actually saving “something” each month; (Note it is never impossible to save money, no matter the amount) Reminder: People used to use “piggy banks,” dropping pennies daily.
- Having an up-to-date picture of the individual’s credit score and keeping track of any fraudulent activities that occur;
- Having a mindset for continuous learning and improvement in overall money management.
While there are no clear-cut, exact methods that will fit every household, one thing remains certain. That one thing is ineffective money management will almost always lead to rough financial times and increase hardship and stress on everyone involved.
