Financial Management: How to Manage Your Hard-Earned Money

Money is not really easy to come by. Everyday is a struggle for most of us when it comes to those dead presidents and I am no exception. The question of “How to Manage Your Hard Earned Money” never really fails to pop up.

I have lived from pay check to pay check since I started working; I guess that has been the case for most people my age. I can remember back in college, I told myself, I will never worry about money when I start earning my keep. I could not wait to graduate, but, oh boy, was I dead wrong! I couldn’t land my dream job, but I did not want to settle for the least one for a few months. Come a few months, I was still jobless and was still living off of the modest allowance my dearest mom sent me.

I was so happy to finally land a job that could pay for my cell phone bills, allow me to buy the clothes that I wanted and the rest of the things that I wanted to have. When the first paycheck came in, I was okay with living within my means, but then I wanted more. I wanted to enjoy the perks that I saw other people enjoying with evil plastic money. I joined the troops and I guess the war with finances started from there. I really did wish handling money was taught in school, say, start us early in high school.

That joyous feeling of receiving the salary was replaced with worry, annoyance and self-punishment due to the expenditures that were piling up. I was losing the financial battle. I did not have any savings and my ATM would only have the maintaining balance. I was spiraling financially. I thought to myself, I need to pay off some things to ease the burden, so loans came in and I became stingy not because I was saving, but because I had nothing to spend. Life has been like that for the past 8 years since I started working and I have been turning it around this year.

Sha Nacino has lived that phase like the rest of us and she wanted to turn it around. The difference was that she actually did something to change the situation.

During her Personal Management Seminar last month, she discussed a few things that helped her with financial management. She said we needed to do three things to turn things around:

1. Define our financial goals – ask ourselves, how much we want to have in a given time frame
2. Discover our big “WHY” – ask ourselves why we want to succeed in our finances
3. Develop healthy money habits – tell ourselves to achieve financial freedom through different strategies to achieve financial goals

I assure you that honestly figuring out where you stand financially in itself is already the first step to changing your lifestyle.

Sha discusses that while there are many things we could do to achieve our financial freedom, we need to be smart about our money and grow it. We need to develop healthy money habits, such as the following:

Live within our means. Do not spend the money you do not have, and save some that you do and spend only what you can.

We have been doing this cyclically. Come paycheck, we pay off all of our bills and leave nothing for savings, where the right formula should be:

Income – savings = expenses

Oh but yes you would say, my expenses are actually eating up my income, leaving nothing left for savings. What can I do? Sha Nacino tells us that we need to accumulate assets and eliminate liabilities. Now tell me, do you really need a new android or iOS phone when your current one is still holding up its fullest function?

Once we eliminate those unnecessary expenses we call liabilities, we free up a few bucks that we could use to save and invest. I started looking into mutual funds last year, while it is still in plateau, it is a good start. I was battling over buying a new gadget versus investing. The latter won as you can see. Sha Nacino advices that we need to look into these for our long term financial goals. As young as we are now, it is never really that early to get ready for our retirement. To know more about reaching your financial goals you may read through these articles:

• Money Matters: Reaching Your Financial Goals One Step at a Time

• Developing the Millionaire’s Mindset Seminar by Mr. Chinkee Tan!

Financial Management: How to Save and Invest Money

How can I save and invest when my income from my current job is insufficient? Can you sing, dance, write or have a special skill that you are truly passionate about? Then Sha Nacino tells us to use that passion and monetize it. That is where extra income can come from. Then, maybe, if we are wise enough, we will have more money to save and invest than to spend.

But we have not addressed the white elephant yet, that ever blinking neon light that says “you still have credit card debts to pay”. Sha Nacino tells us to determine how much we owe and pay more than that minimum amount, any bonus or extra money should be used to pay off the credit card debt. Once done religiously, you would feel a little bit lighter each month. It would be a struggle, but at the end of it, you will feel a dead weight is lifted off of your shoulders. Trust me on this one, I did pay off 2 of the major credit cards I had this year and cancelled them. I only keep 1 for emergency purposes now, which I rarely use. What a joy it really was when I finally closed those 2 cards. It’s as if I told myself, you are actually all grown up now and wiser.

Spending is inevitable and living within our means is an option. I have been punished enough by the mistakes I made and the unreasonable spending choices I had. 8 years has been a struggle and I am sure come a few years it would still be, but I would like to believe that I would be living comfortably in the next years to come because I have admitted that I had a financial problem and I am doing and have done something about it.

This post is a little bit personal and might be different from what you usually read on the site, but I know we will never get the message across if it was not honest.

I am like you, struggling, threading the deep financial abyss, but we can learn to swim and head to the shore through proper financial management.

Personal Wealth Management by Sha Nacino

authorsha@gmail.com

www.bluebackpack.com

Financial Management: How to Manage Your Hard-Earned Money