| How to Manage
your money
(...Continued
From HowTo Manage Your Money Pt 1)
What Money Cannot Buy
Money cannot buy security,
because security is a psychological state. To some, it means
having enough food to eat, clothing on your back, a shelter
over your head, or someone who loves you. To others, security
requires millions of dollars in tax-free accounts around the
world.
Money can’t buy love
and happiness either. In one telephone survey, 275 people
in the San Francisco Bay area were asked if they believed
that they would be significantly happier and more loving if
they had a million dollars. Seventy-six percent of the respondents
replied, "Yes. Absolutely." Then the research company
contacted ten millionaires, and asked them, "Did making
your first million dollars make you a happier or more loving
person?" The response was unanimous: "No."
The best things in life—the
sun in the morning and the moon at night—are free. And
money doesn’t guarantee happiness. But financial abundance
does offer a number of practical benefits. Sleep, for one
thing—very few affluent people stay up late worrying
about having too much money. Money also buys privacy, space,
and silence.
Three things help me
get through life successfully:
an understanding husband,
an extremely good analyst,
and millions and millions of dollars.
—Mary Tyler Moore
Wealthy people do have problems,
but they have less to do with survival. There may be some
forlorn rich people and some delighted poor people, but on
the whole, managing your money certainly gives you a leg up.
Simple Principles for Sufficiency
In Walden Henry David Thoreau
described how by living frugally, growing his own food, building
a hut with scrap lumber he’d found on some land near
Walden Pond, he would only have to work for six weeks a year
to earn enough to live a quiet, contemplative life. There
is much to admire about his experiment (which lasted a season
or two), but such a life is not for everyone. You may not
want to follow Thoreau to Walden Pond, but here are some simple
principles that you can follow:
Live Below Your Means
Many of us believe our main
money problem is how to make more of it, but how we spend
it is in fact more important. Because as our income increases,
so do desires and expenses. It’s all a matter of scale.
Many wealthy people end up in debt.
No matter how much money
you make,
if you spend more than you earn
you shall be eternally poor.
—Noah Webster
Money is so easy to spend
that an alarming number of us have put away little or nothing
toward our later years. Applying fiscal discipline is a central
part of managing your money. Most affluent people become and
stay that way due not to extraordinary incomes, but to an
unassuming lifestyle and the self-discipline to spend less
than they earn, while investing the rest.
Pay Yourself First
Make it an ironclad rule to
pay yourself by putting away ten cents of every dollar you
ever earn until you are seventy years old, and teach your
children to do the same. Before you pay the bills, before
you pay the IRS, before you give to charity, put that money
away as if it never existed and learn to live on the rest,
no matter what. Put that ten percent aside in a safe nest-egg
account or very conservative investment and let compound interest
work for you all day and all night over the years. Never mind
the fancy investment strategies, schemes, and experts. If
you do have money to experiment with, that’s icing on
the cake. In a true emergency, give yourself a few days to
decide if you really need to draw out any of the principal
to spend. Never draw out more than half of the principal.
At the age of sixty-five or seventy, it is yours to do with
as you wish.
Earmark Your Money
Whether your income is derived
from a salary with taxes withheld, or whether you are self-employed,
one of the most practical steps you can take in managing your
money is to create a budget, clearly earmarking your money
for distinct categories. Once you’ve created the budget,
then stick with it. While this is not a radical idea, few
of us put it into practice, given the level of credit card
debt in this country. Unless you already have tax withholding
at your work, divide any income as follows: For every $1,000
you make—
Immediately put away $100
(10%) in your savings.
If you are self-employed,
put aside whatever percentage of your gross income that goes
to state and federal taxes.
If you are committed to donating
a share of your income to charities, earmark that fund next;
don’t wait until the end of the year to see if there’s
anything left. If you decide to donate five percent of your
gross income to charities, that would be $50 out of each thousand.
Put $50 into a rainy-day fund.
Put $50 into an account for
Christmas, Hanukkah, or other holidays.
Put $50 into a vacation account.
That’s a total of $450,
leaving $550 (out of every $1,000 you make) for household
expenses: the mortgage or rent, food, utilities, medical care,
etc. The exact percentages may vary from household to household,
depending upon the makeup and age range of its members, but
the principle is the same —earmark and budget your money.
Exerting this financial discipline will eliminate a great
deal of pre-tax as well as post-retirement stress. You gain
self-reliance and self-respect by taking responsibility for
managing your money in this way.
The Two Essentials of Business
Success
In order to succeed in nearly
any business enterprise, whether you work for a large corporation
or are self-employed, you must operate on these two principles:
First, be good at what you
do. That means ongoing study, practice, innovation, and refinement.
Treat your work as a form of skill training. Never believe
that you are as good as you can get. Each day, each year,
strive to master your work. No matter what you do, if you
become one of the best in your field, you will do well (if
you also pay attention to the following principle).
Second, be good at promoting
what you do. There is no telling how many exceptional, gifted
people exist in every field who are not successful because
they were unwilling to promote themselves. I know extraordinary
musicians whose songs will never be heard by more than a few
people, while the top forty charts include many forgettable
but well-promoted clichés. It’s a sad irony that
those most dedicated to their art or craft, who most love
what they do, understandably want to spend their time getting
better at what they do but fail to grasp the need to promote
themselves.
Ask yourself: Am I good at
what I do? Do I provide a valuable service? If the answer
is no, then stay out of sight and work at improving what you
do. But if your answer is yes, then blow your horn! You can’t
help anyone if they don’t know you exist. Whether or
not you have any innate interest in promotion and marketing—whether
or not you enjoy it—it has to become at least half of
your job, your energy, and your attention at the beginning
stages of a new venture. Promoting your business helps you
to help others and provide a valuable service in the world
as only you can do it.
The service you render
others
is the rent you pay for your room on earth.
—Wilfred Grenfell
The Soul of Money
It is easy to get lost in
the practical details of managing money and forget the higher
purpose of this gateway: to provide a foundation for spiritual
practice and to free your attention from the task of survival.
Lynne Twist, co-founder of The Hunger Project, put it this
way to Michael Toms on New Dimensions Radio:
Money is an inanimate object
[but] we can assign to it a spiritual meaning and voice and
power if we choose to, and give it some soul. Money doesn’t
have any soul, but we do, and we’re the people through
whom money flows and with which money speaks . . . And when
our spirit is unleashed, what’s unleashed is the prosperity
of the soul, of the heart. . . and in that truth, the whole
world belongs to you.
When I became committed to
teaching whatever I learned, more information poured in. In
the same way, as you contact the joy of sharing your abundant
spirit, more spiritual wealth pours down from the heavens,
bathing you in its light. Managing your money is provides
another arena of practicing everyday enlightenment.
From that point of awareness,
we turn now to the source of all beliefs—to the mind.
It serves as a prison for some, but for you can also hold
the key to freedom.
| Authors Details: Dan Millman Website |
More Articles On How To Manage Your Money
(How
To manage Your Money - Your Personal 'Beta')
(How
To Manage Your Money Part 1)
(How
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