If I asked you what the three most important things are in your life, what would your answer be?
- Do not think about material objects;
- Do not think about the tangible items;
- And do not think about something that would not have any value for you a year from now.
Instead, the answer must be on the abstract side of life, the emotional side, which would have the same effect on our lives a decade from now as it has today.
Can you think of an answer?
These three tangible things, yet more important than our families even are;
- And Security;
These are the three concepts in our lives that make life worth living. Without these emotions, we cannot consider ourselves to be alive and thriving. All three share the same pedestal of significance. And financial management helps us in making all three a permanent part of our life. Let us find out if this is even possible or not.
Financial Practices and Happiness:
Sound financial practices help you in managing your money. And as is the scenario in the present times, money equates to happiness.
I am not trying to sound fickle or materialistic. I am genuinely not trying to make you understand that money plays a prominent role in our happiness.
A person who is living on government benefits for the unemployed. He can see that he would have a better future, but only if he had some more money. He can get that money through loans for benefits, and bad credit is not an obstacle at all and actually secures his chance at happiness. Getting that money is made through financial planning.
This one was an extreme example, but even the simplest of things that bring us happiness are dependent on money. And the prudent use of funds can only be done through financial management.
- Giving a rose to your partner every day;
- Celebrating years of togetherness with each other;
- Having a child together;
All of these are moments of joy in our lives, and this joy would only heighten when you plan your finances.
Financial Practices and Contentment:
Financial management practices not only strive to make you happy, but they also make your content and utterly appeased with your financial situation.
I will explain this one with an example as well.
You must have heard that every government in the world decides upon certain goals that it has to complete during its term in office.
Similarly, people also have these goals in life that they want to accomplish before a certain age.
- These could be ;
- being married at 28;
- buying a house at 30;
- having two kids by the age of 35;
- possessing a strong investment portfolio to retire at 40;
It is in human nature to become satisfied at even the tiniest of accomplishment. When a college student gets a perfect 4.0 GPA in his first semester, the level of satisfaction for all of his hard work is visible on his face and in his demeanor.
So, imagine what the level of contentment would be when the same person achieves the bigger goals in life. Since all of those goals can only be made real through financial management practices, it isn’t wrong to say that they bring satisfaction.
Financial Practices and Security:
One major part of financial management practices is to ensure that the practitioner is always secure.
Financial management helps a person become competent enough to face any financial calamity head-on without the fear of failure looming over his head.
- These practices do this;
- By focusing on the art of budgeting;
- Focusing on investing and money growth;
- By focusing on saving money in an account that will not be used until an emergency;
- By focusing on eliminating unwanted assets that are draining money instead of growing;
All of these activities will guarantee that you will have enough finances to combat stressful situations life may throw at you.
An expensive piece of equipment in your manufacturing unit breaks down to the point of no return. It could be catastrophic for your business’ production capacity.
However, if you had kept a contingency account, which is money saved up for an emergency, an essential principle of financial management, you would be able to avoid the catastrophe from ever happening. It would be because you would have the means to replace the equipment as and when needed.
At the end, all I want to say is that financial management practices have changed many people’s lives. They have made it possible for people to go from seeking loans to start finding a home loan and become a homeowner in a good neighborhood in England.
If you want that kind of accomplishment in your life, it would be wise to start following the rulebook of money management.