Money 101: Why You Should Manage It Carefully

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Productivity 222: Tweaking The Settings

Money is a measurement of worldly success

Though it isn’t a measure of real achievement from relationships, achievements or fame, money is used to “store” value and influence

Without money, it’s impossible to do pretty much anything

However, money is only as valuable to each person as their ability to use it

Mathematically, you can’t out-earn reckless spending habits

Without a well-defined purpose, you’ll never have enough money

  • Saving is a matter of priorities, not income, and anyone can do it

Wise money management feels like getting a pay raise

  • A penny saved is more than a penny earned because of income taxation

Saving money allows you to take advantage of compound interest

Compound interest is a mighty force

  • Investing once and waiting 40 years will always give more returns than investing the same amount across 20 years
  • At the same time, a credit card’s minimum payment will often require spending 5-20 times the original debt

Your mental wellness depends on proper money management

We make routine money decisions through feelings and passions, not logic and systems

  • Poor money management is one of the most common causes of divorce

Improper money planning is a disaster

Management comes from crises and current feelings

  • Without a plan for the future, it’s easy to only focus on the present
  • A lack of “big picture” budget planning creates “time poverty” and fatigue
  • More frequent impulse buys from saying you owe it to yourself
  • Loneliness leads to needless spending to “just go out somewhere”
  • Unable to adapt to pressure from a general rigidity from fear about money

Unexpected events can be emotionally devastating

Inability to invest in great ideas or lucrative endeavors

Unrealistic expectations about anything personally related to money

Overly reliant on others from seasonal financial dependence

Appropriate money management makes life simple

Management is proactive based on goals and dreams in the future

  • Marriages no longer have conflicts over money
  • Purchasing staple items don’t cause guilt, shame or fear
  • Universal feelings of empowerment and control

Unexpected events aren’t traumatic

Ability to take advantage of opportunities as they arise

A general sense of awareness involving all money-related matters

Freedom and independence from others

Though the love of money is the root of all evil, money itself is amoral

Money is power to acquire things or get things done

  • Managing money gives you more energy and the ability to free up more time

Money travels toward values and philosophical principles

  • The more money someone has, the more accurately it shows their heart’s state
  • Mismanaging small amounts will predict mismanagement of more substantial amounts
  • Money management and people skills are closely connected

Happiness naturally comes from saving for a desired goal

  • Buying things is never as rewarding as buying experiences

Giving should be the ultimate end to your money goals

Most people falsely believe that they should hold onto money tightly

  • Input with money needs outflow of money
  • Giving should be on something that isn’t benefiting you
  • Giving has a spiritual element to it as well that affects our souls

The greatest happiness from money comes from using it to help someone else

  • Scientifically, people are far happier from spending on others than on themselves
  • Any person at any stage of life has the resources to give to those in a worse state of need
  • Without desiring to give to others, more money only creates more fear of losing it

If you don’t want to read anything else about money, all wealth-building secrets are expansions of the following rules

  1. Have a healthy distaste for debt
  2. Spend less than you earn
  3. Curb reckless spending
  4. Do your research on everything you spend and never spend on what you don’t understand
  5. Fully understand the difference between “want” and “need”
  6. Make your money work for you when you’re not working
  7. Give to others much more than satisfying yourself
  8. Find legal ways to avoid paying taxes
  9. Spread around the risks that you take on
  10. Skill with money takes patience, perseverance, and focus
Next: Money 102: A Hard Liability
Jump Ahead: How To Be Healthy