How To Handle Money So You Get Richer, Not Poorer

How To Handle Money So You Get Richer, Not Poorer

Money that comes your way through inheritance or tracking lost policies can be most gratifying. It might be a surprise or the successful result of a long search. However, the most satisfying and intelligent way to gain money is to make your own.

Do you only earn a salary and find yourself with nothing left by the 10th of the month? We hear that story often. It doesn’t seem to matter whether the salary is large or small; the cry of frustration is the same. This happens because fundamental actions are ignored. Gaining cognisance of these principles can change your life, no matter what you earn.

The basics of money management

You have heard it all before, but with money, the rules do not change. Cash, investment, and wealth building have always operated in the same way. Money is always fair within the constraints of canny knowledge and compound interest.

Budget: For many, this sounds tedious, but it is a vital part of wealth management. Keeping track of what you have and what you spend can be constricting because you may discover you are living beyond your means. However, a small effort each month to reconcile income with expenditure is a no-brainer compared to an endless struggle. This helps you judge what you can do without and how much you can save.

The left-over money: Many assume this is money to burn, but you should change this thinking. Take half of that surplus and put it into a good retirement annuity or investment account recommended by a professional financial advisor. As this money grows, the success will motivate you to increase your savings over time.

Track your spending: Small purchases add up quickly. Be aware of where you are overstepping your budget. It is a good idea to save your receipts or keep a spending journal. Avoid credit cards where possible. Use a debit card instead so you know your limit and cannot overspend.

Avoid unnecessary debt: Do not commit to extra monthly bills for items you cannot afford. Learn to delay gratification. Just because your credit qualifies you for a certain loan does not mean you should take it. Once you open multiple accounts, the pressure at the end of each month blossoms.

Save regularly: Deposit money consistently into a savings or retirement investment plan. Use a debit order system to ensure the amounts are consistent. Saving is a necessity if you want to build wealth. The amount you begin with matters less than the fact that you have started.

Building wealth is a mindset

Money is not finite. A common mistake is thinking that because others have more, you will always have less. In fact, if you focus and work hard, the amount of money you can make and multiply is limitless. Learn to manage your money as early as possible (perhaps with that very first pay cheque). People who fall into debt often never learned to manage the flow of their money or develop the focus to work within their limits while growing their investments.
The purpose of money is what you make it. If you think it is just something to be spent, you are missing the point. Money’s primary purpose is to work through:

• Spending
• Saving
• Investment
• Donating
  
  Money must move and engage creatively to remain viable. Investments drive economies, and the more you understand this, the more adept you will become at managing your own.

Watching your money grow
Never spend more than you earn. Spent money is “gone money,” and it is expensive because you lose the returns you could have made had you invested it. However, you should still enjoy your money. If you have a solid wealth management services plan in place, you can spend your allotted monthly amount without guilt.

Hone your skills and never stop learning. Look for advice from a certified financial advisor and stick to proven strategies like property, index funds, and established retirement funds.

Get a free report of all your life and investment policies
Verifi is an online tool provided by Springpoint Finance that provides you with an immediate and up-to-date overview of all your life insurance and investment policies. By sourcing information from all the major insurance companies and presenting it in a comprehensive report, it simplifies your financial planning. With Verifi, you are able to access information on all your life and investment policies at a glance for no charge once a year. To get your free report, visit: www.verifi.co.za.

Contact Springpoint Finance
At Springpoint Finance, we are dedicated to helping you move from “spent money” to “growth money.” Whether you need to start a pension plan or require a professional insurance brokerage to review your portfolio, our experts are here to guide you.