Financial Management Tips

In these times of global financial crisis and talks of recession it is wise that we should be conscious of our money habits. Recession or not, our financial habits are something that we should take a second look on. Little money mismanagement can hurt us, without us even being conscious about it… until it’s too late.

Here are just some of the suggestions to make us become more money-wise:

1. Live Below Your Means

Before you take your next frapuccino on your favorite coffee shop, think again, can you really afford that lifestyle? Stall the upgrading of your cellphone to the latest model when your present handset is doing just fine. More shoes? Really now, were you able to wear all the shoes that you already have?

These little “luxuries” are what’s hurting us the most. If we can learn to discipline ourselves and differentiate the necessities from the luxuries, we might do well on our finances.

2. Save For the Rainy Days

It cannot be overemphasized. Learning how to save can make the big difference from financial ruin to a financially fit individual. Even if you start small, say just a P50 a week, what’s important is you get to start the habit of saving. Once you get to earn more, you can increase the amount of money you save.

3. Live the Simple Life

Learn how to do away with the material things and just live with the basic necessities. Don’t be too materialistic. The habit of keeping up with the Joneses isn’t healthy and may hurt your finances terribly in the long run.

4. Don’t Believe Those Get-rich-quick Schemes

One weakness that helps scammers make their jobs easier is the inherent greed in every individual. The promise of earning high returns with a quick investment can easily lure you to part with your hard-earned money. But before you do that, remember the saying, “When something seems too good to be true, it’s because it is.”

5. Pay Your Debts

If you can avoid them in the first place, do so. But once you availed of a loan, be sure to meet your due dates and pay your debts. Aside from a clean credit reputation, you can save a lot from the interests and penalties that you might pay if you failed on your obligations.

As a rule of thumb, start paying off the ones with the higher interests.
These are just some of the suggestions that we can do to check our money habits. Of course, getting financial education and having a plan can help us manage our finances better.

The coming Year (2009) would be a perfect time to correct all our bad spending habits and take control of our finances. (Source: Pinoy Business)