How Do You Manage Your Money?

There are three very different ways people use money. Two ways are well-known because most people do one or the other. These two ways are saving and spending. But what is the third route to managing money? In this article, I will be discussing all three ways of managing money.

Saving

Saving involves not touching your money until you have enough to spend for something you need or something that you really want. Money is something that shouldn’t be taken lightly. It can serve as a protection when you need it. That’s if you use it correctly. Therefore, saving is an important way of managing money.

But how do you save money? Well, consider the term “loose change.” Why do they call it that? They call it that because people go searching for it in their car when they are just a little short in the drive-thru. Now, consider the value of a penny. If you were to save a penny a day for a year, you would have $3.65! Sure, this may not be too much, but let’s take it a step further. What if you were to just save a dollar a day. Now, it really makes a difference because you just saved up $365 at the end of the year.

Saving is usually what people do when they can’t afford to go on that vacation they’ve been planning since last year, or when they have a debt to pay. Priorities need to be considered when saving. As much as we would like to say that vacation is more important, common sense says it isn’t.

Spending

We all love to do it. Spending money means we have money, but spending usually gets us into trouble. How? Consider the use of credit cards. Most of us spend money that we don’t even have. The result is a huge amount of credit card debt. Plus, many fail to realize that they are paying more due to interest rates. This makes no sense for people who know how to manage money.

This isn’t to say that spending money isn’t bad. That is what money is made for – to buy and sell. But living beyond your means is foolish. Some forget to budget their money and eventually suffer the consequences later.

Before buying anything with a credit card, ask yourself these questions: Do I really need it? Will I use it? And, Is it really worth it?

Do you really want that cup of coffee? Coffee now is getting even more expensive, Some pay up to $4 for a cup. Consider how much you would be saving if you gave coffee up for a year. $4×365! I’ll let you do the math! Think of ways you could spend your coffee money.

By asking yourself these questions, you will eliminate needless spending habits and will help you to save up for something really worth buying.

Donating

This is the third way of managing money. Many entrepreneurs say philanthropy is how they spend most of their money and that it is more beneficial than spending it for themselves.

Donating is a great way to use money, but it can be dangerous. It is a great way to managing money because a generous hand is an open hand, which means it’s easier to receive something back. Generosity goes a long way, and if you help people out, they will be more inclined to help you when you need it. The dangerous part of donating is the fact that you can be scammed if you are not careful.

Donating doesn’t have to be dangerous. Giving money to people you know and trust is the key. Friends may not be able to pay you back, but many have found that their friends will always be there to return the kindness that you showed them.