I am surprised when I hear people say they do not really care about money and how it moves, they just want to live their lives but the reality is that money touches every part of our lives. It affects our choices including where we live, what we think about, how we want our activities to be like, and so on.
You see, the principle of money remains the same no matter the position or the level on the ladder that you are. Let me tell you a secret; everything is working against you from being rich, the game is rigged to make you remain poor, or even fall from being rich to becoming poor. From marketing, inflation, increased needs and so on, everything is working against you and you need to make calculated steps else you fall.
Whether you agree or not, we all have a unique relationship with money which is affected by our background and this carries us through our lives. We are not all meant to be entrepreneurs, Sincerely I do not subscribe to people being entrepreneurs because they like the name, this is because it is more stressful, heart-aching, and financially draining at the beginning and in the middle but simply understanding money and how it works can place you at the top even when you are climbing the ladder and looking for security.
Even when you are working, you should learn that if you give someone the power to feed you, then you are giving them the power to starve you. If you do not want to be traumatized about money, then you need to learn about it, and stop spending it the way you are spending, instead channel it the right way.
If you are willing to start improving your financial life, the first thing to do is look at your negative financial statement. The ostrich effect will keep you in the same position, so you need to overcome it. Be willing and able to open your account statement at all times so you can know how your money is coming and going from your hands.
When you start to look at your account statement, you then understand how much comes and goes from your account, the next thing is to have the total amount you spent for that month saved up somewhere. This money is something you need to be sure that you have your life on track in case there is an urgent need to spend. This money should be able to cover for immediate needs that are away from your personal budget.
When you are done with this, it is important to close every bleeding pathway for money. If you are making money but losing more, then you are as good as not making at all, and still in debt. It is important to pay off your debts especially the high interest ones immediately before talking about investment.
When you are done paying these debts, the next thing that should come to your mind is building an emergency buffer which you can also call an emergency savings. This can be three times your income for a single person and six times your income for a married couple. This is very important in case you lose your source of income, have health issues, and many other unpredictable scenarios. This money helps you buy time till you can figure things out right.
I support savings for two things. In fact, there are only three reasons why you should have money in the bank. The first being your one-month expenses for cushion, the next being your emergency fund, and the third being money you want to save for a purchase be it a building, project, and so on. Asides this, your money should not sit in the bank.