Money is a factor that we all can’t avoid. I mean, money is a requirement in this life.
Without money you can’t buy anything, you can’t travel, you can’t go to school, you can’t get medical attention, and neither can you get a loan (don’t you need to have saved in order to be granted a loan sometimes?).
It’s like money attracts money. This is a very sensitive thing that requires proper management. Let’s look at it from both the business/company’s and personal point of view.
Company’s point of view
In any organization availability of money is what makes all the operations run smoothly. Proper management is the responsibility of the accountant as he/she is in charge of the company finances.
Some of the ways that indicate mismanagement of money within a company include:
- (a) High expenses
A company should be able to spend less than what it is earning. Is that not what is called profit? And it is the primary objective of any firm.
- (b) Poor investment
Why would a company invest in a project that is not viable? That would just be draining its resources and at long last, it would start experiencing financial constraints.
A company should invest money in resourceful areas such as installing security software to protect its information or opening another outlet to expand the business.
That’s why creating a budget is something that is very important since it acts as a guideline of how money should be allocated.
Personal point of view
Some people get broke the next day after getting paid. Why! It’s because most of them don’t know how to manage the little they have.
Some go partying and spend their money on friends, while some go for holidays and when they come back they have nothing to spend.
But a wise person doesn’t spend all they have but rather save some. Some of the ways that show you are managing your money poorly include:
- (a) Unnecessary expenses.
- (b) Having huge debts while you are earning.
This is a clear indication that you are spending more than you can afford.
Here are some tips to help you manage your money well
- (i) Creating a budget
- (ii) Understanding your income.
- (iii) Avoiding unnecessary expenses
other related articles of interest:
Many people across the world are faced with the challenge of managing their income and therefore, you should consider sharing this information to your friends on your social media accounts such as Facebook. You might end up helping someone out there.
Image Credit: money managemenet dilemma by envato.com
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