You have probably heard the expression “money makes the world go round” before, but what does it really mean and where did it come from?
Interestingly, this expression was brought into the public conscience in the 1960s when it was a line in the famous musical Cabaret.
The expression simply means that everything in this world would stop without money.
It allows us to do everything from buying and trading with others to ensuring we have a roof over our heads and a hot meal on our dinner plate.
However, you may have also heard the notion that “money is the root of all evil”, attributed to the Apostle, Paul.
It is true that money often leads to power, and power can corrupt, though this is a particularly fatalistic mentality to have towards money!
Money is many people’s biggest problem, as, with the costs of living and the societal expectations of ‘success’ increasing rapidly, many fear being left behind.
This can often create a feeling of dread or doom when people think about money and their futures.
However you may feel about money and the financial system ideologically, there’s no denying that to live in modern societies, money is an essential requirement.
So how can we be sensible, safe, and proactive with our money?
There are many financial advisors, speculators, financial institutions, and ambitious individuals that preach their own ‘Golden Rules’ for how best to manage your money.
This article will look at three of the most commonly mentioned rules of money. We will delve into an explanation for each one to assist you in developing a clearer strategy for your money management moving forward.
Rule Number 1: Spend Less Than You Earn
This is undoubtedly the most simple rule for money management. For many, living paycheck to paycheck is the norm, meaning any unexpected expenses can cause turmoil in people’s finances and their state of mind.
Big businesses have the fortune of being able to operate in massive amounts of debt, as the financial system needs successful businesses to survive and thrive.
For most individuals, this is not an option, so being focused and careful with their money is imperative to their survival and overall well-being.
The key to this is simply spending less than you earn, which will allow you to continue saving, even in small amounts.
Building up a little nest egg will also cover you in the case of any emergency scenarios or unexpected costs that strike at the most unfortunate of times.
Try to avoid taking on unnecessary debt and putting yourselves in the pockets of creditors, credit card companies, or even less reputable loan sharks.
Be similarly cautious with legal loan companies, as they often offer extortionate and frankly criminal APR rates that saddle people with seemingly never-ending debt.
Rule Number 2: Make A Plan
Ensuring you follow rule number 1 will allow you the opportunity to start building up your finances. If your monthly outgoings are equal to or almost equal to your income, then saving could be a long, slow process.
This is why making a carefully thought out financial plan and strategy is essential if you wish to improve your financial circumstances.
There are a few things you can do to assist with this, including writing out a plan on paper or typing it up on your computer.
Clearly write down as detailed a list as possible of your known financial commitments, breaking it down into annually, monthly, weekly, and daily expenses.
Consider mortgage payments or rent payments, utility bills, transport costs, food, and other expenses you may have in your household.
Seeing this out on a list, chart or graph allows a much clearer understanding than if you leave all this information in your head.
Do you have an additional bank account or savings account? If so, then set up a direct transfer plan for your payday each month, moving across the amount of funds needed to make your required payments for that month.
Savings accounts also often offer good interest rates, so be sure to shop around and find a savings account that is suitable for your needs.
Rule Number 3: Nurture Your Money
The financial system is one of the most complicated in the world, and this can regularly lead to people feeling daunted at the prospect of diversifying their portfolios and planning for the future.
Investing in stocks and bonds?
Investing in a local business?
These can typically feel out of reach for regular Joe’s, however, this doesn’t have to be the case. If you have the finances to seek financial advice from financial advisors or the like, then this of course gives you a great advantage.
They can help you outline your investment objectives and create a solid investment strategy. They can guide you with how much, when, and where, to invest your money to allow for optimum growth and a secure future.
For many, this is not an option, so it requires them to undertake a little more research themselves to see where, when, and how much they should invest their money.
There are now many individuals and groups that you can access online to learn all about different investment products, from high-interest savings accounts, stock market trading, and the rapidly growing cryptocurrency market.
Taking riskier strategies may bring high returns, but also crushing lows. Always be sure to carefully consider each step you take with investment, as it can be a bumpy ride.
Adopting a stable and slow-building investment strategy is often a safer bet, though, of course, it requires a little more patience.
Final Thoughts
This article focused on three key strategies for making the most out of your money. Hopefully, these rules will help you in building a stable, consistent, and reliable financial strategy for your money.
Remember that these things take time to implement and even longer to reap the rewards, but stick to the path.
Be patient, calm, and concise when making any money decisions, seeking out guidance from those in the know where possible.
Financial Disclaimer
This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.
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