Personal Money Mangement 101

Now look, I am the first to admit that managing finances can be a boring task, however, that can all change. If you understand the basics of money management and how it will benefit you, that can be all the motivation you need to spend time doing it.

There are 3 principles that you need to understand when it comes to your finances:

1. Spend less than you make

It is built into our culture to buy, buy, buy. The problem is that more people spend more money than they bring in. Then they end up having to borrow money just to make ends meet. This is not a good fiscal plan.

2. If you have to borrow money, you can’t afford it

I had a friend recently tell me he could “afford the payment” on a new car. All that tells me is that he can’t actually afford the car. If you can’t pay cash for something, by definition you can’t afford it. If you have to resort to borrowing money to purchase something, I would think twice. A house is the only thing I would say doesn’t apply to this principle.

3. Make your money work for you

Investing is key to have a sound financial plan. Don’t depend on the government (or anyone else for that matter) to pay for your retirement. Take matters into your own hand. There are 2 main investments that I will focus on and they are: Real Estate and the Stock Market.

It is my goal to systematically break down these principles as well as others through this blog to give you a good resource to turn to when making major financial decisions. I will begin to tackle these principles and how to practically apply them to your life over the coming weeks, so stay tuned…