One of the most perplexing questions that you will have to deal with in your life is going to be this – “How do I manage my money?”

Whether it is handling personal finance or managing business finance, money management is one of the most essential skills that should be possessed by not only every entrepreneur, but also every human being as such!

Whether you think you have too much or too little of it, or just as much as you need, you’re bound to wonder as to what you can do to make more money and live a more comfortable life. And you’re surely going to wish you had someone to guide you in managing it correctly!

The truth is only you know where you should really be spending and where you can save up.

Financial lessons are learnt not just from firsthand experiences, but also from other people. How you use your money depends on several factors such as your upbringing, what you learned from friends, financial advisors, a spouse, the Internet, and so on.

As far as sound financial planning is concerned, it is always suggested that you start young. The logic behind this is simple – the sooner you start, the more you will have saved by the time you retire.

Money Management Lessons

Mentioned ahead are a few lessons in money management that everyone should learn while they’re young, to ensure a fruitful and comfortable life later.

1) Budgeting is Important

While you may think that creating a budget is a huge challenge, it is actually not. In fact, sticking to it can be extremely tricky, especially if you’re not used to budgeting.

Keeping track of your cash flow is vital to your financial success. If you’re serious about making and following a budget, you will need to create a realistic one for it to be sustainable.

In order to make a realistic monthly budget, gather all your receipts, bills and financial statements from the previous month. Sort them in two different categories – fixed (rent, car loan, mortgage, etc.) and variable (groceries, electricity, clothing, restaurant bills, repairs, etc.).

Jot down your monthly income/revenue and subtract your expenses from it. Once all the deductions are made, you should get a final figure in the end, which denotes your savings.

Take some time to analyze your expenses and figure out where you can cut costs. Of course, you will have to keep making minor adjustments to your budget every now and then, but do make sure that you’re honest with yourself.

If you have any surplus, you will have to decide what you want to do it. You may want to invest it, save it for an emergency, or lock it in a retirement plan.

2) Save, Save, Save

Apart from saving for a rainy day, you may want to start working towards building yourself a healthy corpus to live a comfortable life post retirement. While it may be difficult to divert money towards retirement savings in your 20s, you can certainly get cracking on it in your 30s.

With time, you can increase the percentage of the amount you set aside for your retirement account. You can begin by putting 5 percent of your income into it and gradually work your way up to 15 percent.

3) Your Insurance Coverage Matters

You can get yourself a good insurance cover while you’re still in your 20s. Get one which is most affordable for you. However, as your assets grow, you will want to get a better insurance cover, one which protects your health, finances, house and car, in case something untowardly happens.

Insurance may seem expensive, but if you consider the long term, it is worth the price, especially in times of uncertainty. So do your research and get a cover that suits you the most.

4) Be Careful with Credit

This has to do with living within your means and resisting the temptation to spend on things you don’t need and/or cannot afford. Overspending will get you into financial trouble and there will be consequences in the form of debt and going through the whole grind of making payments to get rid of it.

Apart from that, you will also have to think about your credit report and credit score, and try to keep things looking as bright and sunny as possible.

Keeping tabs on your credit score will also alert you of possible fraud if you score changes dramatically, without you having played any role in it.

5) Emergencies Can Strike Anytime

All surprises are unexpected, but they may always be pleasant. More often than not, unpleasant surprises turn out to be expensive.

Keeping this in mind, it is always recommended to set aside a good amount (your income of about three to six months) in an emergency fund which can be utilized in case of an emergency, without having to immerse yourself in debt.

6) Clear Financial Goals are Easier to Achieve

If your financial goals are clear, you will find it easier to make budgeting, investing and saving plans. Your financial goals may include anything from owning a home within a stipulated period of time, paying off your car loan, getting out of debt, building an emergency fund, starting a retirement fund, or creating a college fund for your children, and so on.

While everyone’s financial goals differ, the one thing that remains common is the will to work towards achieving clear and concrete objectives.

7)Avoid Emotional Spending Triggers

Don’t let your emotions control your spending habits. For this, you need to understand your emotional connection to money. Once you’re able to solve the riddle about your spending attitudes and triggers, you will find it a lot easier to form healthier financial habits.

Emotional triggers include feelings of depression, boredom, having a bad day, or a reason to celebrate. Spending money or shopping on all these occasions is essentially supposed to make to you feel better, but for a short term.

Once you consciously make an effort to become aware of your spending behavior, you will be in a much better position to control these triggers and replace the urge to spend with a healthy habit such as exercising, indulging in a hobby, spending time with your family, or simply talking about it to your partner.


If handled well, money can be your best friend. But if misused, it can ditch you when you need it the most. It is always important to remember to be in control of your money, rather than let money take control of you. The above tips should help you figure out the role it plays in your life and provide you with some guidance about how you should prioritize your spending, budget accordingly, and save better.