Keeping oneself financially healthy is equally important as keeping oneself''s physical health. Many people disregard this aspect but how important is it to be financially healthy?
One way of keeping your financial standing on a passable rating is by managing your finances properly. So what does it mean to manage your finances?
Financial Management according to Wikipedia is the effective and efficient management of money or funds in such a manner as to accomplish the objectives of an individual or an organization. So when we talk about Financial management, you need to consider three (3) important aspects:
1. Effectively - (Effective - Adj.) Which means adequate to accomplish a purpose; producing the intended or expected result. Being effective means doing the right things as intended. There's an intentional awareness on your end that for you to accomplish something, you have to do the following steps. You should know the "what" for you to manage your finances properly.
2. Efficiency - (Efficient - Adj.) Which means performing or functioning in the best possible manner with the least waste of time and effort. This means that when we manage our finances, we need to manage it in the best possible manner. Efficiency is about doing the things in the right manner. You should not only know the "what", but rather you should also know the "how" in order to save time, money and resources.
3. Money - It is any object or record that is generally accepted as payment of goods and services and repayment of debts in a given socio-economic context or country. In short, it is the "legal tender." This is the acceptable mode of payment. Some would correlate it to cash, check, treasury bills and other short term investments.
In learning the concepts of financial management, you need to put these three (3) aspects into play: (1) You need to know what you need to manage which is in this case, it's money; (2) You need to understand how will you manage these resources; and (3) You need to understand important concepts when it comes to money.
These are the first steps in order for you to manage your finances which i will discuss further on my next blogs.
So with that, knowing how to manage your finances will help you achieve your individual and collective goals by diligently keeping & properly handling your money or funds. These are the fundamentals that we need to know before we dig deeper to this topic.
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Having problems in managing your finances? Are you having difficulty eliminating your bad spending habits?These are common questions raised by common persons.
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