In the world of scarce resources, finances tend to matter. It is for this reason that it is important for one to be a master of his own finances. It is also of significance that one ought to be wise enough as to get their priorities right. The practice of prudent management of finances has been the reason for the existence of accountants and auditors, financial managers and advisers and other professionals in the field of finance. They ensure that the scarce financial resources within our reach are put into use in the best possible fashion, so that they can meet our needs. The financial resources have to be so carefully utilized as to incur huge profits that will keep us relevant in the ever competitive world. It is therefore important that all and sundry are trained on how to use them wisely as to meet their current needs and also those of posterity.
Types of finances
Finance is subdivided into 3 subcategories which include personal, corporate and public finance. Of these three, personal finance is the most emphasized and many discussions revolves around it. This could be due to varied reasons such as due to its vulnerability to mismanagement, and misappropriation, simply because it entails financial management from an individual perspective. From experience, one is likely to make impulse buying if there is no clear personal budget. It is for this reason that there are numerous financial experts earning a living through training individuals on the sound management and use of their hard earned money. Perhaps this attests to the old cliché that money is not a problem, problem is how to use it. It is the choices that you make that affect your income and therefore it is upon you to make sound choices in order for your personal finances to start shaping up.
The Power of Gradualism
The contribution of small efforts done and repeated everyday cannot be underestimated in attaining success. In this case, the need for starting saving and investing from that little amount of salary, the one that some refer to as peanuts or monkey salary is the stepping block that you use to reach to your gigantic financial freedom. For example, to illustrate the cumulative power of saving little amount of money, think of water that trickles from a tap of a tank. If you were to put a bucket in the morning and go to work, by the time you will be coming back later in the day, you will most likely find a bucket with considerable volume of water. This is the same gradualism, persistence and consistence that needs to be applied in saving and investing our finances. Start saving from the first day of your first income, It is wise to save small amount for a long period of time rather than huge amount over a short period.
Money is important in that it oils the cogwheels of the economy whether on a corporate, individual or personal basis, thereby making it run smoothly. Since the inception of money and the ultimate extinction of barter trade, accounting for personal finances remains an elementary and the most fundamental undertaking for anyone. It is therefore not a mistake that a person who cannot account for his personal money is very poor at managing corporate and public finances.