Everyone has a different story to tell when it comes to the way they manage money. There is no right or wrong way, and that’s OK. Different strokes and all that. Budgeting is one thing, but the way you approach managing, spending and investing your money will actually play a major part in your financial success in the long term. Below are my 4 tips to money management, something every smart woman – and man – should follow!
1. Quality over quantity
When it comes to most purchases, this is the number one rule. Yes, you might pay more from the outset but if the quality is there, it will likely last the test of time. This goes for so many of life’s expenses, including clothes, appliances and furniture. It’s easy to go cheap and nasty, but eventually whatever you have bought will break down or will need to be replaced. A common trait of smart money managers is to buy less, but buy quality. Think about it, you don’t need 12 black blazers in your cupboard, you just need 1 really well cut, high quality blazer, and it will be in your wardrobe for years to come.
2. Stay away from the amateurs
“So you think it’s expensive to hire a professional? Wait until you hire an amateur”. This perfectly sums it up. As much as we like to think we can, we just can’t do everything. We need to outsource parts of our life to other people, whether that be plumbing work on our house, hairdressers or financial planners. If you are always on the hunt for the cheapest of the cheap, then you might engage a total amateur who ends up costing you more to fix anyway. The smart woman will hire a referred, qualified and trusted professional for the job (whatever it is) so that they know it is done right the first time round.
It’s easy to go cheap and nasty, but eventually whatever you have bought will break down or will need to be replaced
3. Don’t put all your eggs in one basket
When it comes to investing, putting all your money on black, so to speak, is akin to gambling. Diversification is a major player when it comes to investing and should be part of any person’s investment plan. No smart women (or man) will ever just buy shares in one company alone. They will strive for a diversified and balanced portfolio taking into account different business types, sectors, countries and asset classes.
4. Cover what needs to be covered
It’s smart to insure the important and expensive things in life. I’m not talking about getting extended warranties on your toaster, I am talking home insurance, life insurance, car insurance and health insurance. Yes, insurance costs money but you can bet it will alleviate the financial pressure on these big ticket items if something ever happens.
The above tips aren’t just about basic budgeting, it’s about shifting your overall mindset about your money strategy. If you can start to view your spending and investing habits differently you will reap the rewards in the long term.
Featured image via Pixabay under Creative Commons CC0