How Personal Finance Management Practices can Save the Day?

Personal Finance

Finance is a term that all of us have heard at least once in our lives, yet its true meaning is still aloof to us.

Finance relates everything that money can relate to.

For instance,

If money brings luxuries in our lives, finance will be involved.

If money is able to fulfil our needs and wants, finance will be involved.

If money makes us competent enough to deal with uncertainties, finance will have a role to play in that as well.

Finance is term that involves money coming into your pocket and leaving your pocket, with the inclusion of everything it can do between these two occasions.

When the word personal is attached to finance, it only involves the money practices that surround your personal life.

You might think that I am being too broad in my explanation, I might be because there isn’t a proper way to explain this notion, it is that grand.

However, I can try to make my explanation clearer, it would involve three examples.

The Prosperities

When do you say that you are prospering?

What is that one occasion that makes to believe that you are truly flourishing?

Is there a meter that can measure the scale at which we are thriving?

The answers to all these three questions are going to be ambiguous. However, there is one thing that is going to be the same in all of these and that is your financial health being sound.

When you have more than enough in your bank balance to fulfil your needs and still have plenty left to cater to your desires that is when you can say you are prospering.

For instance,

If I have to buy an iPhone 11, which would cost around €1,000, and I can buy that phone without putting any unwanted strain on my bank account.

This would be the occasion that will equate to me flourishing. And my financial management practices will provide me the means to do just that.

The Necessities

There are a lot of things in life that are absolutely necessary for our survival.

Having food on our table three times a day;

Having a roof over our heads, that we can call our home;

And wearing nice and clean clothes every day;

Apart from these three, everything else that we have can be lived without. That is not to say that everything else is redundant.

Owning a car, a TV, a Smart Phone and even a nice watch can also be deemed as necessities. Anything that aids us in our day-to-day life is important and a necessity.

Therefore, providing for the necessities is our paramount objective when deciding a budget.

A person who can easily provide for the basic needs has good money management skills, while someone who has to stretch every last penny on just the utilities is definitely doing something every wrong.

The Accidents

You must have heard the phrase “life is uncertain” too many times in your life. I cannot even count how many times my parents have told me this.

Have you ever wondered why we are told this time and time again?

The answer lies in finance management. Whoever tells us that life is unpredictable does so with the intention that we make ourselves prepared for the uncertainties through money.

I will tell you a personal incident.

I was mobbed a few years ago; they took my bag, my money, my jewellery and beat me to a pulp. I was barely an intern then, I already a student debt hanging over my head, and with no insurance I was overwhelmed with the exorbitant hospital bill that would land on my lap as soon as I was discharged.

Do you see what is wrong with the situation?

Instead of worrying about my health and the two cracked ribs that I had, I was worrying about the financial consequences of being mobbed. That is what is wrong with this scenario.

If I had indulged in financial management practices, I would only have concentrated on my health.  I had taken online loans that are easily available in Ireland and things did work out in the end, but the repayment was another disaster that I had to endure.

Winding Up

In the end, I want to tell a few very important financial management practices.

  • Always focus on saving, because savings help in dealing with the uncertainties of life with only one focus.

  • Always make a budget that will let you know how much deficit you will have or how much surplus you will have. This is important to have a clearer picture of your finances.

  •  And finally, if you can, try to find ways to grow your money. Find a better paying job, work on a side business, invest in shares or mutual funds, but try to grow your money.

Just implementing these three can make your world seen a lot more enjoyable, a lot more carefree and a lot more enjoyable.