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Monday, January 18, 2010

Learn to handle own money wisely

Garry Kasparov, in his book How Life Imitates Chess, explains how one can improve one’s decision-making via calculation, evaluation and analysis. One’s success comes from harnessing the inherent power of these forces.

The same principle can be applied to our personal financial management. Just think of cost of living, salary and debts as a game of chess.

Let’s talk about the credit card. Much personal financial chaos comes from credit card mismanagement. The credit card is not

a woman’s best friend and this is best conveyed in a movie titled Confession of a Shopaholic.

The opposite works. Why not a debit card? Spend within our limits. The most important thing is to understand the difference between “needs” and “wants”. “Needs” are our necessities. “Wants” are mostly temptations which we can live without.

Learning simple accounting principles also helps. We can enrol in elementary accounting class, learn from the financially savvy or read books like Rich Dad, Poor Dad.

There are also simple personal cash flow software that we can purchase or download from the Internet.

It’s important to distinguish between assets and liabilities. A car is a liability as it depreciates over time. We don’t have to buy big cars to show off if we can’t afford it.

Don’t make sudden or impulsive buys just because of peer pressure or because your peer owns one. Think of things in appreciative and depreciative values.

Don’t badmouth the company over your salary, which is very much tied to your education, experience and performance. Enrolling in relevant graduate or post graduate courses like those offered by Open University of Malaysia, Wawasan Open University, etc helps. Our value appreciates.

A greater understanding on living cost, like studying our personal expenditures, helps. Could it be a huge chunk of our money is used to finance our personal bad habits, e.g. booze, smoking, gambling, etc?

What about our personal eating habits? We can bring down the cost of food by consuming more greens, as greens are less costly. We can buy from less costly sources such as hypermarkets.

Failure to change to be more financially savvy is no longer an option in an age of rising living cost. Learn to apply financial facts and figures in managing your personal finances. Knowledge changes one’s financial destiny.



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Harap dapat tinggalkan nama anda apabila membuat komen yer..Tak kisah la nama betul ke samaran....TQ

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