Beyond The Basics of Personal Financial Management

“Everyday is a bank account, and time is our currency. No one is rich, no one is poor, and we’ve got 24 hours each. –Christopher Rice”

Isn’t each day precious? Shifting between minutes and seconds, each day brings us infinite opportunities. Yet, what we get stuck on is our limitation to understanding ‘rich’ and ‘poor’. And, this is where the basics of personal financial management slip in. Many people earn a lot, yet they find it hard to save the money and acquire financial management skills. On the other hand, many people earn less but excel at financial management. You might be curious to understand what is the difference that makes the difference. Let’s try to understand deeply what is personal financial management all about:

1) Personal Financial Management Is Definitely Not About Your Income:

The amount of money you earn doesn’t determine balanced financial management. You could be earning millions, but your management skills would be like a big hole in your pocket. Earning, as it’s claimed, is not the same as saving, right? What defines your financial status is your meticulous management of money and your financial affairs. How you plan to save, how you save and how you spend speaks volumes about you. So, the next time you question why you lag in personal financial management, ask yourself how you’re planning to save, how you’re actually saving, and how you’re spending. You will get a lot of information by asking yourself these important questions.

2) Personal Financial Management Doesn’t Depend On Your Social Status:

You could be earning millions, or you could be earning thousands. However, what differentiates between the two isn’t how much you’re earning but how keenly you’re organizing. Spending like a miser or like a spendthrift, is perhaps what determines the financial balance you keep aspiring for. If you understand when do you need to spend freely and when do you need to hold your hand against spending, you will understand a lot about your ways of spending. Mostly, all of us want to spend. But, we fail to understand where spending is needed the most. If only we alert ourselves, what can stop us from attaining a financial balance?

3) Personal Financial Management Is A Lot About Financial Goals:

Often, we find problems in earning a lot or earning less. However, the problem lies elsewhere. We have goals for everything in our lives, yet when we spend, we don’t give our goals a thought. We don’t ask ourselves what we need to buy in the next month or year. We don’t pause to differentiate between spending inadequately and spending wisely. We don’t save enough for our goals. Present gratifications ruins the way to future glory, most of the times. That doesn’t mean you shouldn’t spend at all. What that means is that you should spend time while keeping the big picture of your life in mind. Where do you see yourself financially in the next month, 6 months, a year or so? Ponder.

4) Personal Financial Management Is A Lot About Evaluation And Revision:

We all seek chances to explore, learn and rectify our mistakes, don’t we? Having said that, many a times we feel guilty of spending a certain way. However, the point is to evolve continuously. What financial mistakes have you made in the last few months? What did they teach you? How can you do better? Ask yourself these questions; learn, and organize your finances accordingly. You can learn a lot by doing so. Revise your mistakes and plan more keenly. Forge ahead with the confidence of learning from your past experiences.

5) Personal Financial Management Is Also About Understanding Risks:

Well, you may or may not be familiar with financial risks. Sometimes, we don’t save enough for our future, because of our absorption with the present moment. We find it difficult to calculate risks that may happen in the future. It’s beautiful to live in the moment, but it’s fantastic to save some for the future. You never know where or how you will land in the future. So, rather than a bag of regrets, carry some money to the future. This will also help you make more robust future plans. Save some to gain some, is what I mean. You never know how that saving saves or benefits you in the future.

Personal Financial Management, as we now understand it, is about balance, planning, organizing, and some saving too. Pause and align your financial goals. Revise your mistakes and learn. Grow with each financial failure. Forge ahead with confidence. Happy Financial Managing!

While you think about your financial goals, we at VA Talks aim to serve you while you live your best life. Reach out to us and we will serve you the very best of everything.

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