Parent Money Management Skills

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You will agree that having money brings a sense of security. This is because we need money for our survival, whether it be food, shelter, gadgets, clothes or anything else. However, it is true that money cannot buy happiness, but it is also true that money can buy us things that make us happy.


 

But making money is not enough if you want to enjoy financial freedom and live a secure life. Achieving financial freedom is a state that brings a lot of security and mental peace and needs money management skills to be practiced. With a lack of money management skills, you can still feel like you're on the brink of a financial cliff. But, when you are able to manage your finances well, life becomes easier and you have more time to focus on other important things in life.

Living within the means

It is one of the habits when strictly followed, it can lead to saving a lot of money. We all earn money in one way or another and use it for our survival and to meet your demands and wants. But when you start spending it on your desires without thinking about your finances, it can lead to a black hole in your financial life. In such a case, whatever you earn, it will never be enough to meet your desires and on the other hand, you will not be able to contribute much to the investment and future planning.

Save as much as you can

No matter how much we earn, if we cannot save, we will never be able to enjoy financial freedom. Our parents continued to diligently save, even in small amounts, for our future. This has not only helped them give us a better life, but also a secure future.

Saving money also helps us build substantial wealth over time which can be used later to achieve the goal of giving our child the best education and living a relaxed retirement life.

But to achieve this, we need a lot of patience. Savings don't happen overnight, and most importantly, if you want to accumulate your savings, you'll need years. However, many of us don't have this skill because we want to build wealth faster. And to do this in a short period of time, many begin to search for the best performing funds or constantly check the market for stocks and stocks.

Have both insurance and an investment

Having an investment increases your money over time, while insurance gives you coverage. Both are equally important for having balanced finances.

Investing: Getting things right to build wealth and achieve financial goals. But before you invest, there are a lot of things you should know:

• What are the investment options that provide you with the maximum return?

• What are the investment options that you can start with the minimum and maximum funds?

• Which increases your money faster.

• Where your money is most secure.

• Tax saving investment plans.

• The government offered investment options.

Insurance: Having insurance provides you with coverage against financial risks. Some insurances also provide returns such as maturity benefits as well as coverage against the investment made.

The purchase of life insurance, health insurance and term insurance are some of the most common that protect you against the estimated financial risks.

Points to keep in mind before purchasing insurance:

• Benefits offered.

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• The amount you have to pay in the form of premiums

• Benefits at maturity

• Return

• Tax exemption, whether applicable or not.

Do not redeem your investment until it is an emergency

Redeeming your investments is a huge thing, it not only reduces the rise in the value of the investments, but some time can lead to a large loss.

This is common when a particular investment stops doing well, we tend to pay it back or postpone other investments. But by doing this, we are doing our investments much more harm than doing good.

Many buy back because of market volatility or a downturn, while some do because they need money to meet some of the other needs. But, before you think about it, you must think about the consequences of redemption.

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