As we all know finance is the lifeblood of every business/firm/household, its management requires special attention. Financial Management is that activity of management which is concerned with Planning, procuring and controlling of financial resources. Think back to your very first pay cheque paper route money or a cheque from a part–time job/ Full-time job. Did it come with instructions? Instructions seem to be included with the simplest devices these days. No one is born with money management skills. By the time we’re adults, we are expected to be able to manage our money effectively; however few of us are taught how. Therefore, many people experience the usual emotions that occur when they don’t know how to do something well. These may include: • Frustration • Guilt • Envy • Anger • Shame • Disappointment Like driving a car or playing an instrument, the skill of managing money must be learned and it is never too late to start! Doing so usually pays immediate benefits. People might not earn more money if they budget well, but they will be able to use the money they do have wisely. Someone who manages their finances responsibly has peace of mind and knows how to: • Pay Their Living Expenses • Keep Debts To A Manageable Level • Save For The Extras That Make Life Enjoyable • Avoid Constant Money Anxiety It’s not how much you make, but what you do with what you’ve got. Proper money management does not involve a magic formula to find more money. It simply means getting the most from the money you do have. The following simple strategies can help one to build Money Management effectively: 1. Setting Goals: - Before you can begin to manage your money, you need to identify what is important to you. Then you have a foundation to decide what you want to do with your money. The goals you set are yours; you have the power to choose what is important to you and design your goals accordingly. Most people’s money problems occur because they don’t clearly know what they want to do with their money and therefore spend it randomly. Clear goals are the targets you are aiming for and help you build your plan. Be realistic when setting your goals. You can always increase your savings later, but start by planning for success! 2. Identify Income and Expenses: - Once you have established some goals for your money, it’s time to look at where it comes from and where it goes right now. When we manage our money, it’s easy to get into habits. Some money management habits are positive and allow us to reap rewards later on. Others are negative and can lead us into trouble. 3. Separate Needs from Wants: - As people track their spending, they discover that some of their money gets used for things they really don’t need. Instead, they merely want them and often buy them impulsively. Impulse spending is unplanned spending; purchasing things that you may or may not need, or spending more on an item than you planned. 4. Design your Budget: - Many of us don’t like the word “budget” because they think it means limitations, deprivation and no money to spend on the fun stuff. Relax, your budget is your spending plan – it will allow you to live within your means, avoid the stress of money troubles and give you the freedom to make choices with what you have. 5. Put Your Plan into Action: - You’ve set goals, identified your income and expenses, determined how much to save for seasonal expenses and made choices around needs and wants. 6. Manage Seasonal Expenses: - Now that you have created a workable budget and have planned your pay cheques, the last step is to plan your savings money so that you are able to track and manage your seasonal expenses. 7. Looking Ahead: - Any good plan must involve monitoring, periodic review, and occasional re-evaluation. A spending plan is no different. Circumstances may change, mistakes can be made and your needs will vary at different times in your life.