Apr 28, 2014

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Learning Money Management Techniques for Life

Money management techniques for lifeIt is never too early or too late to learn money management techniques. Knowing how to manage your finances and save is one of the most valuable resources you can give to your children in preparation for life.

In today’s economic global climate, times are tough. But let us look for a moment at the past. If we cast our minds back and delve into the history books, there have been repeated times of financial crisis through the decades and there will doubtlessly be more to come in the future. Balancing the books is not easy; on a national basis, on a business scale or even on a domestic scale, which is why it is important to learn these vital money management techniques in order to survive.

Money management techniques for self-employment

As a self-employed person, money management techniques form an everyday part of my life. Self-employment can provide periods of fluidity with a continuity of work, but equally, there are lean times. Part of the excitement of self-employment is the power to define your goals, find the work and gain payment upon completion. Money management techniques are vital to my strategies, to ensure that I do not starve during the lean months.

Saving is hard to do as a self-employed person. You have to be strict with yourself to be disciplined enough to save even the smallest amount. Setting up a scheme where you have to contribute a certain – even small – amount can help.

Money management techniques must involve ensuring that mandatory contributions are set aside. In the UK, this will be:

  • National Insurance Contributions
  • Income Tax

Heavy penalties are issued if these are left unpaid and it is simply not worth leaving to chance. As a self-employed person, I put away 30% of all earnings to cover this expense.

We can learn money management techniques as adults, but it is far easier to manage finances if you have been taught from a young age. Children grow up with a sense of financial awareness and although we feel on some level that we should teach children not to covet money, there is a world of difference between that and teaching children the value of money – how difficult it is to obtain and how easy it is to spend! Children who are taught to save – even the tiniest amount – are far more likely to be financially stable, with less chance of debt as adults.