you are 18 or 58 it’s a good idea to be smart with your money. Being good with money has several benefits such as the financial freedom of knowing that you can pay your bills each month and that you are saving on a regular basis towards your personal financial goals. Financial freedom means that you have the abilities to have a financial emergency that will not put you into debt. Financial freedom means that you can call in sick to work for one day and not worry about not being paid. Doesn’t financial freedom sound like a good thing to have?
Smart with money vs. Not so smart with money
The definition of being smart with your money is different for everyone. Maybe being smart with you money means that you live on a budget, maybe being smart with your money means that you are very frugal and never spend over your budget. Or maybe being smart with money means that you determine the value of the items versus the cost of the item before you spend any money.
Being not so smart with money can mean that you live pay check to pay check, being not so smart with money can mean that you cannot afford to pay all of your bills on time each month and being not so smart with money can also mean that you do not make your money work for you. If you save money but do not use it to your advantage (aka invest it) then you are not being smart with money.
Do you make enough money?
Everyone’s financial situation is different and maybe you are good with money but you just don’t make enough money to pay all of your bills on time each month. If this is the case then you have to make some changes in your personal situation in order to improve your financial situation. If you don’t make enough money to support your current lifestyle then you have to do one of two things; you have to cut down your monthly expenses or you have to find a way to increase your monthly income. If you need to make more money in order to support your lifestyle then maybe you have to start looking for a new job or maybe you will have to get a second job.
Can you afford to call in sick at work?
When I was a student if I called in sick to work I was not paid and as a student a day’s pay is a lot of money to lose. Even though I only made approximately $40 a day it was a lot of money to lose when you live on a student’s budget; therefore I would often go into work even when I was sick. If you can’t afford to call in sick then you most likely live paycheck to paycheck with very little emergency savings. I know that it’s hard to save money when you don’t make a lot of money but it is so necessary to save money in order to achieve financial freedom. Even saving $25 per month is a great start and it can add up to over $300 per year; that is a great start to an emergency savings fund.
So now let me ask you, are you good with money?
Photo by Leonid
Tahnya is 30 years old and lives in Montreal Quebec. She graduated in 2005 from Concordia University, and she currently works for a major International Financial Institution. She recently launched http://www.mediamadam.ca/. You can follow her on Twitter @TahnyaP.