10 Dos And Don'ts Of Money Management Part 2
I told you I’d be back and here I am! If you missed part one of this post you can find it here! Let’s not waste any time and dive in!
10 Dos And Don’ts of Money Management (Part Two)
6. Do make paying off debt a priority.
If you already have some debt connected to you make paying it off a priority. One thing society will teach you is that debt isn’t a big deal. No one will look twice at you if you have some debt and are paying just the minimum payment every month to pay it off. But the fact of the matter is, if you have debt you don’t own your money, it belongs to someone else.
So make paying off any debt you have a priority. Pay above the minimum payment by putting extra money towards it each month. (If you’re really serious even look at selling some things or other side jobs to give even more money towards it.) If you’ve ever wanted to be financially free or even close to it, it can only be achieved when there is no one knocking on your door for money every time you get paid.
7. Don’t buy things you can’t really afford.
This one is a little tricky because I believe that most people don’t really understand what it means to be able to afford something. Why? Because again, in our society if you can afford the payment, you can afford the item. Take buying a house for example, one of the main factors for deciding how big of a loan the bank will give you is by how much money you make.
They look at your monthly income, and decide how much of a payment you can afford each month based on your income and debt ratio. But in a lot of cases from the bank’s perspective you might be able to “afford” over $1,700. But the thing is they are not factoring in all of your other bills, or you trying to build a savings. Not to mention the fact that sure you could “afford” that payment but if you buy a house worth that much money you’ll be paying it off till you’re a grandparent.
Also, if you accept a loan and payment based on your current employment what happens if you get let go or you just want to switch jobs? You then have to make sure your next job can afford that payment and you’ve now put yourself in a position of choosing a job based on money and not what you find fulfillment in.
To simplify, buy items you can afford to buy in full right then. In the case of big loans like school or a house, use only what you truly need to use or can afford to pay and then make sure to take #6 seriously and work towards paying it off.
8. Do learn and invest in the right things.
I don’t know much about investments or the stock market so I’m not about to try and give you the scoop on that. I’ll let you google Dave Ramsey for help with investing if that’s where you are headed in your finances. But I will advise you to invest in the right things in general.
When I say invest I mean putting your money towards things that are worth while, either in the money you may get back from them, or the good they will add to your life in the long run. I think spending your money on investments such as owning your own home, or owning properties to rent is awesome. But also investing in schooling, or learning a new skill is also important. Instead of wasting your money on things that will inevitably end up in a Goodwill box put your money towards experiences and things that will be good for you not just in the moment of buying them, but down the road and in years from now.
9. Don’t connect money to emotion, worth, entitlement, or identity.
This tip may surprise some of you but I think it was important I put this in. I think a big problem we have with our relationship with money is that we tend to make a relationship with money.
Money is a tool, a thing we have to use for good or bad. Our worth doesn’t come from how much money we have or don’t have. It is not apart of our identity or character and it doesn’t make us entitled or not entitled to anything. Don’t let your emotions run your money. Don’t buy something because someone else has it or because you think it will make you happier, better, cooler, etc. Use your money on things you need and things that will be good for you now and later on.
10. Do use your money for good and give without hesitation to others.
Not only should you use your money for good things for yourself but you should also use it for good for others. I think we have a tendency with money to have our hands white knuckled on what is ours, not wanting to give any of it away. I’ve found that when I have my hand open to others when they need it, it allows me to also have my hand open to accept other things. If you make enough money to live on and save some, then you definitely have enough to share with others. Help build wells in Africa, give to the homeless shelter down the street or help a friend with a car repair when they need it. Living generously with your money will be the best thing you do with your money, ever. I promise.
Well, there you have it. 10 do’s and don’t’s of money management to help you get jump started on your adult finances! It was so big I had to break it into two parts so if you haven’t had a chance to read 1-5 you can find that post here.
I hope this gives you a stepping stone with your money and make sure to look around the blog to find more tips and posts about living minimally and using your money for good!