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How to manage your finance wisely? September 23, 2007

Posted by Han in : Finance , trackback

“You would think she had it all – 3 luxury cars, 2 bungalows and a monthly income of 20,000 dollar. But this woman was in dire financial straits. Her husband had passed away. She had all these assets but she couldn’t keep up with the repayment..

It is not really how much you earn that gets you into financial problems. We have had people earning below 1,000 and even 20,000 who has come to us. It is how you manage your expenses that matters. If someone spends within how much he makes, that’s fine. It is the people who feel the need to have a lavish lifestyle, not keeping track of their income and spending more than they earn who get into trouble.”

The above excerpt is taken from one of the local newspaper entitled “What matters is how you manage your expenses”. This is a real life example of one who had financial difficulties. It is not a matter of how much we earn but it is a matter of managing it.

The important thing here is to learn how to manage your wealth wisely to avoid financial difficulties. One may ask I don’t have a lot; what is there to manage? If you are not able to manage small amount of money then you are not able to handle large amount of money. It’s the principle that is important.

How to manage your finance wisely?

“Make all you can, save all you can, give all you can” John Wesley

1) Save money diligently

We are living in a very frantic and high pace society. Everything is instant. Everything is now. Whatever thing we want, we want it now, not tomorrow but NOW. We get into the habit of buying. That feeling of “owning” something expensive is great. We can show it to our friends.

The greatest obstacle to saving money is spending money. When we have some money, the first thing that occurs in our mind is to save not to buy. It’s a habit to cultivate.

The wise man saves for the future, but the foolish man spends whatever he gets. Proverb 21:20, TLB

There are 2 important keys to saving:

a) Learn to live on a margin. Live on less than we wake. The best is to tithe 10%, save 10% and live on 80%.

b) Learn to be contended. Be satisfied with what we have. Do not compare with others.

2) Make money honestly

Wealth from gambling quickly disappears; wealth from hard work grows. Proverbs 13:11, TLB

Money should be earned by hard work, not some get rich schemes. We should be down to earth. Any quick bucks will quickly fly away! Make sure it doesn’t hurt our health, our family, other people and our spiritual life. Make all the money that we can creatively and honestly.

3) Spend money wisely

The plans of the diligent lead to profit as surely as haste leads to poverty. Proverbs 21:5

Isn’t it amazing we spend a lot of time learning how to make money but we practically don’t need to spend anytime in learning how to spend money! And it is easier to get into debt than getting out of debt. Therefore we must spend money wisely. How can you spend money wisely? The answer is BUDGET. A budget is planned spending. It’s telling your money where you want it to go rather than wondering where it went!

4) Give money generously

It is possible to give away and become richer. It is also possible to hold on tightly and lose everything. Yes, the liberal man shall be rich. By watering others he waters himself. Proverbs 11:24-25, TLB

It is more blessed to give than to receive. The more you sow, the more you reap. Cultivate the habit of giving. People of this world take and take without giving. But God gave his son. Those who give will make more! It’s alright to start from small. Make sure you give and God will bless you.

It is important to manage your finance wisely. Remember, the little that God place in your hand, manage it wisely and God will multiple it.