How to Manage Money and Make it Grow – Earning money is only one part of the equation, but the other half of the deal is knowing how to keep it and make it grow. The inflow of money is not even sufficient to cover the basic living expenses and therefore there is no money left over to save and manage. But if there is a will, there is a way.
If there is no way you can increase the money that comes in, perhaps you can take a closer look at how it is spent and what it is spent on. Just think of the multitude of minimum and sub-minimum wage earners that routinely load up P20/day for their cell phone load. It might not seem a lot but if you could save that P20/day and put it in some savings account that would net you 3 percent per annum, by the time you retire in 40 years, you would have P555,635.70 in your account.
Another big destroyer of personal wealth is the use of credit financing of products, let’s say P10,000 prize tag, but you can postpone buying. Wait until you saved up the P10,000 before you made the purchase rather then being debt for years paying it off.
More than just cutting down on needless expenses and avoiding credit financing, making the right kind of investments would also go a long way to making your money grow. Avoid get rich quick schemes that offer rates of returns that are too good to be true. Go to the alternative. You can start a small business that is perfect with your skills. Determine if the money you are able to save is something you will need in a few months or something that you can live without for a number of years.
The key to managing your money is to find a way to spend below your means and maximize the returns you can get on your savings without taking on risks that is beyond your ability to absorb. And the right time to start doing it is not today but yesterday.
I hope you learn some lessons on how to manage money.
Source: Francisco Colayco, Manila Bulletin