Tag: #moneymanagement #habbit

MONEY MANAGMENT

Money is not life but it's an important part of life, to survive, to give yourself good facilities, and to live in a good condition with two meals a day. Money may not be a power, also it's not like one cannot live without money, but without it one has to struggle to survive, and has to face scarcity in his life. 
As per the slave theory of Aristotle, society cannot be of people with equal living standards. Hence, the entire society especially in the context of Indian society is divided into 3 social classes: Rich people, middle class people and poor people. 
What does this division depict about the people of each class? On what basis these classes are formed? It's on the basis of money, people who are rich, have large amounts of money, they had a good living. Middle class people are the one who are neither rich nor poor, they can make money to live a normal life and can fulfill essential necessities of eating and education easily. Poor class people have to struggle even for the meals, they don't have shelters over their head, they cannot afford education for their children. 
It's said that home is the first school of a child, he learns whatever he sees or feels in his home environment, whatever his parents teach him, he accepts it as their reality. 
A child of a rich class knows that he has money and can make more money in the future, as he is given good education by his parents, he has money in his hand so maybe he knows how to manage it. 
A person of poor class will teach his child about money what? Few among them can barely afford money to give education, he could just say "study and work hard". He himself never had so much money, what will he teach about Money Management to his children. 
In this democratic India where everybody has an equal right to get education, hardly there would be any school who discriminate children on the basis of financial status. The concept of money is taught to children in the home itself, here's where he sees that whether I am poor or I am rich. 
A child of rich parents knows nothing that whatever facilities he is given is because they have enough money and other classes exist in this world who cannot afford it. A child of poor class doesn't know that he is lacking somewhere, he doesn't know that there are people who have all the facilities that he doesn't have. All these things he learns from his parents and the type of environment he understands as he grows up. 
Sometimes even if a child of poor family studies hard and passes with the high grade, the financial conditions and mentality will be same, that he is poor, he can for sure eat well and live well, but he never tries to change himself, to explore himself, except few, all those who have came out of poverty, tries to earn more and more money, firstly for themselves and then for their children. 
The above mentioned things sometimes go wrong because there are many cases, when a person has a good family background, he is born with Silver spoon in his mouth, but a time comes when he is grown up or after several years he is left with nothing and has to face poverty. 
Whereas sometimes a child from a poor section comes up with great talent, determination and struggle and he doesn't face any scarcity of money which he faced earlier. 
So, why these drastic changes occur in the life of people? It is because of the management of money. The amount of money a person handles to fulfill his most important needs, makes life easy and smooth. Money management is a talent, which not everyone has. 
Money management is, how you tackle all your financial aspects, from making a budget and where every penny is being spent,  along with saving money for the future. If a person lacks in money management even the crores or any amount of money proves to be less to him because desires are never ending. 
Under money management one has to learn to say 'NO' to any unnecessary purchasing and 'YES' to the thing which is far more important for the individual. Differentiation between what is unnecessary and what is necessary is also a work of wise human. When one has desire in mind for anything, he cannot resist himself from buying or doing unnecessary spending. 
Money management starts with what assets you are having in your hand, assets like bank balance and property, one has to subtract it from all your debts or liabilities or from the money you have to spend on your essentials. The net amount which is left decides whether you have proper money management or not? If the amount of liabilities is more than assets, it puts your financial conditions in dilemma. 
For proper money management the first and foremost step one should take is setting goal, this helps you to give clarity about which expenses are necessary,  and which one can be cut down. Let's say if a car is your necessity or goal, in order to buy it you have to cut out the expenses of movies, dinners, hiring taxis, buying expensive clothes etc. 
No matter, if sometimes your budget goes up, you should not change your budget and the expenses on different items, this will help you to keep more money as savings and will limit your expenses. Budget should be  changed or should be made of higher expenses if you have increment, or consistently the amount of your money is increasing after sufficient savings. 
People get easily influenced by the magic of market, when one goes to supermarket he/she buys many things which may not be necessary. The marketers and business man plays with the psychology of buyers, they keep goods on offer, give the scheme of buy 1 get 1 free and use many other marketing tricks and there people get stuck in the web of market's beauty. 
When a person lives a student life he gets pocket money from the parents and that becomes the first step of money management, from there a child builds up the quality of money management, and that's the reason parents should leave their children in the world with small amount of money, doesn't matter if he belongs to a rich family. 
Money is something which cannot buy happiness or can give happiness. It's just for fulfilling basic necessities and some hobbies, but yes money makes life easy and comfortable. It can give you a good living and it can motivate you to move ahead. Money is just the necessary evil. 

Money management

Abstract

Money management helps one to control expenses and save the money for other purposes. Money management is a healthy habit. In this article we are going to know why money management is important and how it affects the different classes of society. 

Introduction

Earlier our ancestors usually said if we spent our money on unnecessary Mata laxmi ( Devi of wealth) would leave your house. They basically advise the next generation to manage the money. Today the words might change but the habit of managing money is considered a good habit. 

Nowadays the rich become richer and the poor become poorer. The reason could be many of this situation but the factor affect the all reason is money management 

Our society divided into three part basically: 

  • High or luxury class – This class has a luxurious lifestyle. They are mainly tycoons, businessmen, ministers , doctors and high ranking government officials. 
  • Middle class- This class has a normal lifestyle. They have to earn to feed themselves and get education and pay taxes. They are mainly teachers, low ranking government officials, professors and monthly paid workers.
  • Low class- This class usually wagers who work on a daily basis for their daily bread butter.

Here the point should be noted that high class people live their life without any financial difficulties. Lower class know that they have to work and eat on a daily basis but the middle class people have to pay tax, need to work hard to reach high class and couldn’t complain when they compare their lives to the lower class.  

For this, Money management is a way to make a balance point. 

What is money management? 

Money management is a science as well as an art of organising money to fulfil the needs of an individual or group. The process includes spending, investing and budgeting the capital. 

Importance of money management

We always get advice that watch over the expenditure, don’t buy unnecessary things, do investment, prepare a budget of your expenses and save money on a regular basis. 

  • To get the future goal

We all have some major goals in our life. That goal needs a large amount of money to complete. A higher class person’s major goals could be buying more firms or luxurious items. A lower class and  a middle class person have different goals such as building a home, children’s marriages and their own lifetime security. A lower class person could not put such efforts but a middle class person has to put efforts to make an image in society. They borrow the money from legal and illegal methods to match the status of higher class. It leads them to the grave of loan. Money management can help all the classes to reach their goals. If they watch over their expenses and save money on a regular basis they could attain their future goals. 

  • Managing risk

Money management also gives support to managing the risk. Life is unpredictable. We don’t know what could be next. So it is important that we have enough savings to manage that risk. 

  • Help in saving

Money management also helps in saving money for the future. When you make a budget of your expenses, you get an idea where you spent more and less. You try to find an alternative and reduce your expenditure. That you know how much and from where you can save the money.

  • Bring more opportunities

Good opportunities need a good amount of money. As we know today every skill furnishing classes are so expensive. In the competence world we need to learn new skills everyday. If We want to grab opportunities we need to be financially strong. Money  management helps us to bring more opportunities to reach our goals.

Many times we think about how the rich become richer and the poor become poorer. Do they have their own bank or government supporting them? Are rich people not giving the appropriate amount of wages? Is it because of unequal distribution of resources? 

The answer of all is a live example- Dheerubhai ambani. His father was a middle class person but he built an emperor for his sons. He made it possible because he knew the management of money. He invests, saves and expands his money by analysing, rethinking and with a backup plan. After him his son mukesh ambani and his son also follow the same path. In their case we can say children learn managing the art of money from their family. 

Poor or lower class people thought that only higher education can help their child to become rich or upgrade their living standard. But when the child is not introduced to the term management how could they learn financial management? 

The middle class people have knowledge about money management but they never implicate such terms in their lives. They are dependent on loans for their further needs. 

So it is important that schools need to involve such subjects which could make a brief understanding of money management at primary to higher levels of education. There should be some activities in the curriculum which provoke the student to learn money management. Most of the well educated people don’t know the basic rules of investment. They don’t know because they never get a chance to do so. It is a high to make awareness among the people about the money management.