Do You Have These Essential Money Management Skills

Now, we have looked at 3 articles about expensive life in America. But, why do so many people, students prefer to study in USA?

• Part 1 – How much money can you save in USA
• Part 2 – Why Saving Money in USA is Difficult with Q&A
• Part 3 – It Can Take UpTo 5 Years to Start Saving Money in USA
• Part 4 – Money Management (this)
• Part 5 – Do You Have These Essential Money Management Skills

In spite of all these expense, amount of money you can save is more than what you can expect to save in back in your country (say India). Before reading this article, refer to some of the comments in Part 1 and 2. There are several negative reactions. Do you know reason for negative reactions?

Short-Term Thinking : You are thinking about amount of savings and ROI right after graduation. But, you have to think long-term like

• What is the value of your education for your entire life?
• What is your ROI several years from now?
• Consider long-term salary, not your first year or first job salary.

You have consider salary increase into account.

• Higher Salary != More Savings
• Money Management = More Savings

You need to develop good personal finance and money management skills to save lot of money.  Following tips should give insights to saving LOT of Money in USA plus develop essential money management skills

Basic Money Management Skill

Its’ ok if you don’t track every single penny you spend, but at end of the month, you should know

• Total Income
• Total Expense
• Total Savings
• A plan to save atleast 1% more next month
• Use Mint.com for personal finance management.
• Read the book I Will Teach You To Be Rich
• Read the book Rich Dad Poor Dad

Moderate Money Management Skill

• Learn about Stock, Options markets
• Invest wisely in 410(k)
• Following Financial  Markets
• Understand various Savings options available

Advanced Money Management Skills

• Invest to multiple by several folds (not 1% or 2% interest)
• Invest with understanding
• Dedicated learning to invest  not just in stocks)
• Think like Businessman!

Super Advanced Money Management Skills

• Working for an employer is not going to make you rich ( majority of you)
• Self Employed or Starting Business can fast track you to financial freedom.
• Make use of other people’s money and time to make more money

From my experience, making money is completely entirely different from investing money. Most folks tend to think of making money as having a job with decent pay check. But, there is other side to it. Making money as an entrepreneur.

If you are not an entrepreneur, it’s time to become one. Our parents generation were able to struggle and make it with single source of income and career.

But, today’s fast paced world, having multiple streams of income is how future looks.  Having an extra set of skills will come in handy at time of need. Plus, no matter what profession you belong, the present economy doesn’t favor a single career in a one life time.

With Basic to Moderate money management skills, your life is likely to be financially dependent.

Even with Advanced Money Management skills you are likely to be depended on pay check to run your family.

To become financially independent, you need to develop super advanced money management skills.

Money Management Article Series

• Part 1 – How much money can you save in USA
• Part 2 – Why Saving Money in USA is Difficult with Q&A
• Part 3 – It Can Take UpTo 5 Years to Start Saving Money in USA
• Part 4 – Money Management (this article)
• Part 5 – New Grad’s Guide to Personal Finance, Savings and Investments