In today’s market, proper money management is becoming very important. The term does not mean that the money should be kept in the lockers or should be dumped in the bank. The term means that the money should be used in such a manner that the money itself can grow and at the same time, can provide the essential economic security.
In the modern economic structure, the most unpredictable term is security. It may be economic security or social security or the job security. Problems can arise at any moment and so proper management of everyone’s wealth is very important. If it is managed properly, it is destined to grow and support the respective person.
Money Management Process:
Money management never means that the person who is involved in it is limiting his capacities, it simply means that the person is extending his capabilities. The first step of money management is to check the habit of spending without any reason and to try to save the extra money.
All the pending debts should be cleared as early as possible and the taxes should be managed properly. Then one needs to think about investing the money in various mediums so that the money can grow.
Selecting the appropriate medium is also a part of the money management. There are various type of mediums where one can put the money.
There are the securities market where one can invest his money in the stocks, bonds or mutual funds. These are mediums where the money can grow quickly and the returns are expected to be high. But these mediums also carries a good amount of risk. So, before deciding in favor of these, one should always consult the experienced campaigners of the field.
There are several other options like the treasury bills and investing in the money market, etc. One can also invest the money in the real estate sector. It is more or less a secured market. The value of land in today’s market is always going to rise and so these investments may be called as wise investments. It can also provide life long security to the investor. But the returns are not so high in comparison to the securities.
Next, there are several insurance policies which come with maturity value. These insurance policies are also good options for investment because apart from providing coverage, these policies also provide good returns. Last but not the least, is the bank. People who are not ready to take any risk and more than that, who are satisfied with very low returns, can put their money in the highly secured medium called banks.
One can manage his or her money in various ways, but the most important thing is to maintain a plan and follow a discipline in executing the money management policy.
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Last Updated on : 26th June 2013