Are you a wise shopper? Do you have a daily, weekly, or monthly budget? Do you have a savings account? Do you have any kind of investment?
If your answers to the questions above are all YES, then I congratulate you! You are a money conscious individual. If NO is your answer to all of the questions above, then you have to cultivate a higher level of money consciousness.
Money consciousness is being mindful of how you spend, budget, save and grow your money. A money conscious individual has an intimate relationship with his or her money in the sense that the individual knows his or her financial worth. A money conscious individual is respectful of the value of money and how it is earned. A money conscious individual has financial goals and is committed to achieving them.
If you want to become a money conscious individual, you should try your hand at budgeting, saving, investing and learning financial concepts. These are the hallmarks of money consciousness.
Budgeting is all about setting a limit for you to spend, with the goal of not overspending and having enough money left for saving and investing. If you have not tried budgeting before, then I suggest you start with a daily budget. Your budget should include allocation for food and transportation expenses. Once you feel more comfortable with daily budgeting, then you can move on to weekly and monthly budgeting.
Keeping records of your purchases and income sources are helpful in making a budget. Budgeting becomes easier as you go along since you will have a fairly good idea on how much you spend and earn on an average basis.
Saving is setting aside money for emergency use. You should set goals on how much you are planning to save every month. According to financial advisors, your savings should at least be equal to six months of your living expenses. This way, you will have something to spend in case of emergencies.
Most people find saving a difficult task. You can make it easier for yourself by setting up an automatic savings plan. Under this arrangement, the bank automatically transfers a portion of your income to another savings account at pre-determined dates. It is best to treat your savings account as money you cannot touch so that you will not be tempted to withdraw and use it.
Investing is all about growing your money. Investing does not necessarily mean putting your money in investment vehicles such as 401K plans, bonds, money market, and mutual funds. You can invest by making home improvements, buying land, or setting up a business. Investments can be risky so you have to very careful when you make an investment.
Learning financial concepts is another aspect of being a money conscious individual. Essentially, it's about putting together financial concepts, ideas, principles, values and objectives to carry out financial processes such as tax computation.
By starting with these tips, you are on your way to becoming a money conscious individual.