Budget, savings, investing, & debt. These are the main ways money flows in our lifespan. As I recently transitioned into becoming an investor, I realized that I have my own experiences of all four of those categories and I felt that I needed to share those experiences and maybe provide tips that'll help you effectively manage your money or keep some money in your pocket.
Let's talk about budgeting. One wise person told me to always "live within your means". I'm pretty sure that the majority of you guys reading this post may have heard that saying. However, for the people that haven't, it means that you should spend less on your lifestyle than you generate in your income. This is super important, especially when getting established into early adulthood. I know people that have very bad spending habits. They will get a little bit of money and spend it faster than you can catch a cold.
I have always been a person that's monitors closely how I spend money. In fact, I would be more hesitant to spend my own money than I will spend other people's money. My mother calls it being cheap, whatever. I always thought it was me being mindful of how much money I actually have. I value budgeting. It will ensure that you will always have enough money for the things you need and the things that are important to you.
Following a budget will also keep you out of debt or help you work your way out of debt if you are currently in debt. If you're in a position like me, a college student who's potentially having to pay back some student loans, this is a great plan to avoid any debt. No one wants to have any debt under their name. It causes so many issues such as stress, reaching financial goals, hurting your credit, paying a higher cost from interest, you see where I'm heading? Debt is just inevitable for a slippery slope.
Not only it's important to spend wisely but to also save your money. I repeat SAVE. More than likely, people may confuse the purposes of budgeting and savings. Although they are closely tied, there's a slight difference between the two. Saving solely is you putting money away while budgeting creates a plan on how to utilize your money. Overall, budgeting helps you save.
Saving money is important because it helps protect you in the event of a financial emergency and provide you with a greater sense of financial freedom. Now after "saving" the best for last, haha, let's dive into investing.
Investing in yourself is the most crucial asset you can have in your life. Why not have your money work for you? Investing is a way of building your wealth and generate income leading up to and after retirement. I recently started putting money into stocks in Robinhood a few months ago and man what a smart decision have I made. Literally, instead of watching my money sit in my savings account, I literally watched it double without me doing anything. So easy, right?
The moral of the story is, be smart with your money. There are so many opportunities where you can easily be rich if you just know how to manage your money. So what is the most effective approach? All of them. If you take pieces of advice from each of the categories I explained, then you will be set up for financial security in the future. Trust me!
Some good advice in here! "My mother calls it being cheap, whatever." Had a laugh reading that haha
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