Money is very important in everyone’s life as our lives and decision making revolve around it. Effective money management allows you to live comfortably within your earnings and also helps you to increase your wealth. However, managing money can be tricky business as it involves general management of monetary matters, including banking, credit management, budgeting, taxation, and borrowing. For businessmen, money managements can become a heavy task as apart from customers, cash flow and proper management of accounts is crucial for the proper functioning of a business. Money management is a strategic technique of evaluating trades for risk and prospective profits, analysing costs and income and taking control of risks to maximize profitability. Money management helps in attaining greater control over cost and revenue in both, personal and business perspective.
Money management is also the process of attaining the highest possible interest-yielding value for any amount of money invested or spent. Money management techniques are developed to minimise the amount of money individuals, firms and institutions spend on items that add no significant value to its living standard, long-term portfolios and asset-baskets. There are certain potential techniques that can be used for effective and profitable management of money like cutting on budget for social needs and other such less necessary expenses, spending more on interest bearing items that are investment-boosting and portfolio-multiplying.
Since money management can become a daunting task as it is hard to say that one is better than the other investment as a lot depends on the investor’s profile and risk appetite. one can hire a professional money manager who can help achieve money-related objectives taking into consideration the client’s income-generating capability, taking stock of your money, determine the client’s ideal risk exposure and identify the financial instruments that best suit them.
It’s also important to keep yourself healthy as health related issues and unhealthy habits like smoking and can all add to the cost of your insurance premium and void you from the benefit of lower insurance premiums. Further, you aso need to decide whether you need a longer term policy, which will lower the premium and allow you to build the required corpus with smaller premiums.
Investment and management of personal money as depends on one’s age since at a younger age once can afford to take more risk and make a lot of money. However, one becomes older, one’s investment choices and preferences are likely to change as your risk appetite decreases and you would not like to expose yourself to the risk of losing your hard earned money.
