Managing Money - your key resource

Managing money can be challenging for many people. Sure there are challenges, but there aren't any secrets to learn. It just takes discipline and inspiration. You need to stay enthusiastic and focused on important goals - goals associated with your frugal living lifestyle.

In other words, keep your eye on the ball, and you'll do fine. You don't need to hit a home run with money management, just hit a single and get on base. You'll be surprised how many runs you can score just by repeatedly getting on base.

The Basics

Let's look at the basics of money management and how it can lead us to financial freedom. We need to recognize some basic principles and see the benefits of managing our money well.

Awareness makes us better prepared to handle any situation.

From a 30,000 foot view, managing money entails making it, using it wisely, saving it for those "rainy days" that come along, investing it so it works for us, and keeping it safe from those that might like to get at it without ever working for it.

So, if there are reasons to believe we're making insufficient income, then there are many things we can do about that.

If we make sufficient income, perhaps we never learned individual responsibility. It's a key to being successful in anything we're involved in.

And, if you're interested in teaching kids about money, you'll need to be skilled and experienced as the instructor. Keep in mind that your children are likely going to take care of you in your advancing years, so teaching them well now is an investment in your own future.

Why is Managing Money so Difficult?

We face many challenges when we consider how to go about managing money. It's a daily task - often we face it many times each day. We either learn how to do it well, or we continue to suffer each day with the consequences of our inability to manage our money.

Let's look at some of the common problems associated with managing your money. Here are a few that I will discuss in more detail on the linked pages.

Many of us just don't recognize or appreciate the value of money. This is a biggie. We need to know what money is and how to value it.

There are also many distractions in life to deal with. There are a limitless number of products, services and other enticements that would enjoy having some of your money thrown in their direction. As if that's not difficult enough, there are countless credit companies trying to get you financially enslaved by extending you credit. Once you get good at managing money, you might adopt my attitude, I don't really care about my credit score because I finished playing the credit card game.

If we have our self relatively well focused, then perhaps we find it difficult to prioritize our spending. Remember, first things first.

Often managing money, especially saving it, requires that we see off into the future and motivate ourselves to save for something worthwhile. This is easier to do if we learn how to take the long view. All good managers have a way of doing this.

Conservation and Protection of your Financial Resources

An important aspect of money management is conserving your money so it can provide you with things you really want. It's also important to protect it as a valuable resource, and have a plan for investment so it works for you.

Take a look at basic financial planning to get an appreciation for how we first need to curb spending so we'll have some money to work with. Then we need to get comfortable with using banks to protect our money, and establish programs for saving money so we can accumulate wealth of a size that will allow us to acquire and achieve some of the things that are important.

Putting it Together

The basics of managing money starts with recognizing the difficulties involved in earning it, keeping it and using it wisely. There are many difficulties, but if you are going to be successful, you must be able to handle them effectively.

If debt is a concern in your personal situation make sure you understand the steps you need to take for turning debt into wealth.

You'll also need to learn how to conserve money as the precious resource that it is. The more wealth you've accumulated, the more options you have. Down payments, investments, and emergencies all require at least a small pile of money to address the situation. If you have it, you'll have options. If you don't, then your options will be limited. If you back yourself in a corner, you might need to consider a cash advance to address unforeseen needs that arise. Be sure you understand the nature of a cash advance - it's a type of personal loan to yourself, and it comes with all of the rewards and responsibility of any other personal loan.

Clearly, it's wise to consider various ways to protect the financial resources you have. No sense putting them at risk. Managing money must include protecting the money you have accumulated.

Lastly, you'll need to understand the various alternatives available for investing your wealth. Investments can save you money, make you money, and generally create a more secure future for you and your family. Managing money has a direct and long lasting effect on your ability to be successful and happy. No one is an expert at all aspects of financial management, but to be successful you only need to master the basics.

If you're considering something like hedge funds, you'll need proper management to help you obtain better investment returns. It's wise to seek help from qualified investment counselors such as one might find at GoldenTree Asset Management. Professional investment companies often have the skill, knowledge and experience necessary to support your investment interests as well as handle compliance issues. As with any other professional investment advice, shop around, ask a lot of questions, and select a counselor that you can work with. Ideally, your investment professional will seek to protect your interests as that of their own, and will well understand your objectives when it comes to managing money that you've worked so hard to earn.

If you don't master the basics of money management, then you'll likely not have nearly as rich and rewarding a life as those who do. A frugal living motto of mine is "Earn, Save, Invest and Enjoy".

The "enjoy" part is very important because it entails enjoying financial freedom and peace of mind as a result of your frugal living planning and accomplishments. If you become adept at managing money, you'll quickly move closer to the peace of mind you truly deserve.

Done with Managing Money, take me Home

There certainly is a broad scope of topics here at Frugal Living Freedom. When you think about it, money permeates so very many activities in our lives, therefore, being frugal encompasses a wide range of interests, from being employed to taking a vacation, and just about everything in between. Enjoy the variety, pick up some new ideas, and start making frugality a part of your signature.

I'm a big proponent of being debt-free, and I mean entirely debt-free - no mortgage payment. It's not essential for financial freedom, but you'll love the feeling once you get there. If you didn't have a rent or mortgage payment, how much more could you do for yourself with your current level of income? I suspect plenty.

If you ever hope to see an abundance of wealth, you need to plug the hole in your boat. The wealthy don't necessarily make lots of money, instead, they know how to hang onto what they make, and make it work for them.