5 Basic Money Management Tips And Techniques.

Effective money management is obviously a very difficult task, especially in these days of numerous needs and wants, plus uncertainties. A lot of persons are often bankrupt or frequently lapse into a state of bankruptcy because they do not know some of the tips and techniques required to effectively manage their money. For low income earners in particular, whose wages or income may not be enough to meet all your needs and wants, it's important you pay close attention to these basic tips and techniques to avoid becoming bankrupt, while not still meeting your basic needs. 

This strategies and techniques has helped me to meet my basic needs, become debt free, and also overcome bankruptcy. And I do believe that also applying them to your personal finance, will no doubt help you to better manage your finances, overcome bankruptcy and also live a debt free life.

Without much Ado, let's consider these 5 basic 💰 money management tips and techniques to enable you become a better manager of your personal finance.

Five Effective Money Management Tips And Techniques For Low Income Earners:

1. But Only What You Need At The Moment:

Most low income earners often makes the same mistake of wanting to buy or shop for everything they see or desire. As a low income earner, eventhough your money could afford everything you desire, it's a bad idea or bad money management practice to spend on all that you want or desire. This is clearly because, you do not have financial security yet to guarantee your tomorrow. And even if you do, their could be other exigencies that you may have to deal with, between the time you got your last paycheck and when the next will arrive.

It's for this basic reason that buying only things you need at a particular moment is very important for effective and efficient money management. Prioritizing all your needs is the best way to go. And going for those basic needs that are very essential for you at a particular time, is one of the best technique and strategy that'll enable you to effectively manage your finances, and also remain afloat despite any kind of financial need or challenge.

2. Go For Only What You Can Afford:

It often amazes me how some low income earners, in a bid to getting what they want or desire often spend outside what they've budgeted for that particular product or item. Some even go borrowing, just to get what they want. This is also a bad money management practice that'll definitely leave you bankrupt in the long run. As a low income earner, you need to find a way to be able to live within your means, and also discipline yourself enough to only buy what you can afford.

It's unwise to become indebted because of trying to get what your money can't afford you at the moment, or borrow to fund your want and desire. But if you want to be a good manager of your personal finance, you must always endeavor to live within your means, and buy only the things your money can afford you at any point in time. This will not only help you to steadily grow your income and finance, but will also enable you to live a debt free life.

3. Borrow To Fund Asset:

In these days of high cost, inflation and financial difficulties that often makes it very difficult to do all the things we want to do, and expand our finances. It's clearly not impossible that sometimes, borrowing will become the next and only option. But the question is, what do you borrow for? You see, one thing is to borrow, the other is to borrow wisely. 

When you borrow to satisfy your desires or wants, that's clearly not a wise borrowing. Any borrowing you make outside the goal of expanding or increasing your sources of income is obviously not a wise one. Wise borrowing is basically, borrowing to fund assets. You could borrow to start or fund a business. You could also borrow to buy stock or shares. Whatever you borrow for, that'll enable you increase or expand your income as a low income earner, is sure a good borrowing practice, that'll also boost your money management ability.

4. Have Savings And Reserve Plans:

It's really not possible to discuss effective money management strategies without talking about savings and reserve plans. Savings and reserves are the backbone of your personal finance best management practices. Because they often serves as the shock absorber of all your personal financing mechanism. In my last post, I did suggest setting aside 20 percent of your total income or wage. Ten percent of that amount should go into your savings, while the other ten percent should be kept for reserve.

This is one of the money management practice I've always used to remain afloat financially, and also live a debt free life. As a low income earner, you need to tailor your budget to only expend eighty percent of your gross income or wage, while you save and reserve the remaining twenty percent.

5. Be Your Own Chief Financial Accounting Officer:

A good money management practice, sometimes requires that you take inventory of all that you've spent money on, and also give a good financial account to yourself. This practice and technique will enable you to know the areas you've done well enough, and areas you've got to improve on in your next expenditures. Personal financing is really not an easy task. Because at times, you could feel its your money and you've got the right to expend it the way you want, hoping that the paycheck will keep coming. But you've got to be more disciplined and cautious enough to take personal accounts of all your expenses, in order to grow financially.

In conclusion, effective personal finance and money management is possible. And it's an attitude or skill you must have as a low income earner who wants to grow your income and finance steadily. Following these five tips and techniques will no doubt enable you to achieve this dream, overcome bankruptcy and also live a debt free life.