Basic Money Management Mindset

The first basic thing you must know about Money Management is: Increase Your Income “AND” Limit Your Expense. I use the word “AND”. Not “OR”. When you manage to increase your income, but your expense is also increasing, it’s very hard to have good savings. When you manage to limit your spending, but you never think or put some effort to increase your income, it’s also very hard to have good savings.

What I am going to tell both of you here is all about mindset. There is no magical formula that will save you from $800,- monthly expense with $600,- monthly income.

Because we are not psychic. We don’t know what will happen in the next minute. We can predict, but we can’t be 100% sure what will happen. Savings can save you to have a better life when you are in trouble. Everybody does experience bad moment in life, including both of you. So, please follow me to have your savings well managed.

I know a lot of people near me who are not applying any money management system in their life. Some are lucky because their income is always higher, no matter how reckless they are spending. Some are unlucky because no matter how they limit their spending, their income can’t cover all expenses. No matter what condition they have, they are not applying this system and unless they have a real gigantic savings account, they will fall for sure. Applying this mindset will make you plan for a better future.

Growing Asset

My main purpose of writing money management mindset for you is to increase assets from generation to generation. More assets, easier to get more income. More income, better quality of life. I am not comparing my life to my friends’ life and I don’t want you to compare your life to your friends’ life. I am comparing my quality of life when I was small to the quality of my life now, working hard to have higher quality of life before I die. Also I am looking at your quality of life when both of you were born, working hard to make it better when you are older later, and I hope you can make it better after I die, and get even better to your children. The point is you can’t compare others’ quality of life to yours. It’s like comparing one apple to a durian. Just check how was your quality of life when you were small, and how is it when you are old. If you take action on managing your expenses, increasing your income, and make your money works in investments, I am 99% sure that your quality of life will be much better every day. I am talking about quality of life. Not just a life. If you just want to live, ignoring the quality, you can live. God is more than kind to give you everything to live for free. Food, oxygen, earth to sleep. You won’t die starving. It’s your choice to have a better quality of life.

There will be 3 things I want you to understand. I am not saying that you must do what I say here, because I understand what I write here is what I have in mind, based on my knowledge and experience right now. I want both of you to understand how I think and I hope it will give you better ideas or better hints for better future. If you still don’t have any idea or better system than what I use for money management, please apply my system in your life first until you get a better system one day. Because applying this money management system is much better than no system at all. The 3 things are:

  1. Expense Management
  2. Revenue Management, and
  3. Investment Management.

Don’t worry. I will not write to you long and boring text book story. It will only be simple mindset to have good savings and if you may study advanced finance, you will have other better idea. But it’s okay, at least you can figure out how I think about money now in 2021, for fun purpose.

Remember: It’s not the matter of how much you can earn. But how much you can save.

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