Money And Money: The Importance Of Money Management

It would be liberating to live life without being constantly confronted by money matters. Unfortunately, or fortunately money is the oil that keeps the world system chains turning; governments, institutions, businesses and households. Money is the reason majority of adults grapple with going to jobs that they are not necessarily too excited about, in order to put a roof over their heads and clothes on their backs.

Since money plays a very significant role in our daily lives, it must be handled with great care. The quality of life lived is determined by how much disposable income is available. It determines the location of residence, quality of healthcare that can be accessed, education and every other basic need necessary for comfortable living.

Proper money management is of paramount importance. One of the tools of money management is a personal budget. A budget is a detailed analysis of an individual’s financial plan. It is a very important tool for personal money management. It basically helps in identifying how much money is earned and how much is spent. It must be broken down to the very last detail (read cent). If it is not detailed then it is not comprehensive, hence ineffective (Council, 2012). If one is in the know about how much money they earn and spend, they are in a better position to make accurate short-term and long-term financial projections and decisions.

The main reason why people do not keep personal budgets is ignorance. There isn’t enough emphasis put on the need or importance of a financial management. There is more emphasis on spending and advertising goods and services to the consumer. Attention is more focused on spending and earning than on saving and proper financial management.

It begins from the hou...

... middle of paper ...

...g, health care, education generally translates into a good quality of life, though not in its entirety. It also gives a general sense of well being and peace of mind.

Keeping a personal budget will help to identify unnecessary expenditure. This money can then be channeled into mere productive ventures like investing in bonds, shares or saving. These provide a more disposable income. Not only in the short term but in the long term as well.

Resting in the knowledge that one can afford to access good quality goods and services leaves mental space to focus on other more important things like developing creative ideas for innovation, healthy family and social relationships. It is worth noting that money, whether lack of or in plenty causes many household and social problems. Majority of these problems can be solved by adopting effective financial management strategies.