Managing money wisely (2)

By Jude Ndu - updated: Thursday 28-08-2008

Just as weeds grow in a field where the farmer leaves space for their roots, even so freely do desires grow in men wherever there is a possibility of their being gratified. Many are men's desires but only a few can be gratified at any point in time. Learn to control expenditures. Budget necessary expenses. Study your life style and see which area of expenses can be reduced or eliminated altogether. Every Naira and Kobo spent should be documented and accounted for.

Don’t spend or suspend your tomorrow today. Think tomorrow today. Don’t run blindly with the idea that tomorrow is sufficient to take care of itself. Financial planning is winning. Borrowers tend to solve temporary financial problems by borrowing more money. Often they invest blindly with borrowed funds. Their own idea of financial discipline or fiscal responsibility is robbing Peter to pay Paul. They live their financial lives with their head in the sand hoping and praying that everything will work out just fine.

They are never conscious about their spending habits. They buy things they do not need in the immediate. They spend virtually every dime they make. These folks are consumers. If they have money, it gets spent. If they don’t, they borrow. They think or assume that more money will solve their indiscipline. No matter how much they make, they only get deeper into the depth of debt. With the introduction and full deployment of electronic banking which includes ATM’s (Automated Teller Machines) and the credit card system, many will not be able to resist the financial temptation and would continue to plunge themselves neck deep into the depth of debt that would eventually control their lives.

Debt reveals to the general public the depth of your financial ignorance. The more people you are indebted to, the poorer you are. On the other hand, the more people are indebted to you, the richer and more powerful you are. This is the cardinal principle behind capitalism; it is who is indebted to whom. Always look for ways to extend the actual payment of money as far into the future as possible. Any delay in deferment of payment especially if you can arrange for no penalty for repayment increases the alternateness of the deal by lowering the cash outlay in the present.

Many borrow money continually never stopping to realize what they are doing to themselves. The next time someone comes to you to ask for money, ask that individual to whom else he/she owes money. Why? People never ask the people they already owe for more money. They create bigger problems by going to new people with the same old problem. They perpetuate their own poverty. If you are neck deep in debt, stop! Take a closer look at the situation. Confront it head long. Don’t be afraid of the ten’s and thousands you owe your family, friends, or bank. Pick a piece of paper right now and add up the entire amount you owe people. Realize why you owe and make a commitment to pay back every cent you owe.

Financial fortune is not the amount of financial resources at your disposal but its management. You will have to train yourself to manage money wisely. This is how money attracts more money. It’s management. Going into debt is generally not a good idea. The borrower will always be servant to the lender. See the book of provs 22:7. The difficulty with debt is that in addition to paying back the principal (the amount borrowed), you also have to pay interest on the outstanding balance. Be cautious before committing yourself to any debt. Debts we cannot pay back immediately have a way of compounding our financial problems. The more we can avoid borrowing, the better of well be in the long run.

Financial planning and the budgeting process is the key to successful long-term money management. Budgeting allows us to systematically allocate resources to meet our current and future needs. Budgeting is life’s financial principle. violate it at your own peril. Can you imagine a company or country that operates without a budget? Any management institution operating as a country or company that wants to succeed in the short and long term must have –good accounting system.