Good Money Management Skills

Developing Good Money Management Skills

There were so many families that were affected by the recent financial crisis in this country. This financial crisis has motivated people to take a much closer look at how they spend, save, and what type of investments they have.

Saving money isn't something new but as the "microwave" generation came forth, there has been more emphasis on impulsive spending. The mentality of getting it now has somewhat corrupted the nation. The younger generation of children that are in school now have very little understanding on the basics of money.

Because of the levels of interest rising, there has been more businesses and educational advocated that have began teaching financial literacy to children and adults alike.

Money Management Profiles

Being able to manage money more efficiently starts with a clear understanding of how money is spent and who is doing the spending. There a three basic types of money managers. There are the spenders, savers, and investors. Each of these profiles are described below:

Spenders
This person doesn't plan for the future by saving. Some individuals in this category may think about planning for the future but still use all their extra money splurging on items that they want in excess. So this type of person may earn enough to save but doesn't. They make choices to upgrade their cell phone plan or buy several pairs of shoes, go to the movies every weekend, buy school lunch every day, or spend all their extra cash at the arcade.

Savers
This person saves their money on a regular basis. This isn't a bad strategy if it is coupled with a method that creates multiple streams of income that is residual. The savings is good because it takes care of those unexpected expenses and the emergent financial crisis.

Investors
This person puts their money where it can create residual income over a lifetime. This person does save and will spend but saves for purposes and spends to invest in something with a large return. Some investors place their money in the stock market, which is a riskier type of investment and doesn't always present a residual income potential. Creating residual income is the best investment that anyone can make. This type of investment establishes a more secure financial outlook.

Family Money Patterns

Different family patterns have always been recognized. So why not family money patterns and spending habits? These patterns can affect individuals in two different ways. Some will look at their family money patterns and say they will not follow in that same pattern and others will naturally gravitate towards the pattern.

Families tend pass on different legacies to their children. There is nothing greater than passing on great money management skills. When creating generational habits it can become generational wealth. It starts by some sort of investment and leaving behind a legacy of spending, saving, or investing.

Ilana Diallo is a writer and consultant who understands the challenges of personal finance and knows how to overcome them. Her educational programs have proven to assist people in moving towards the financial success that they have dreamed of. Ilana has continued to serve individuals in the community through homeless shelters and other low income agencies. She has as a writer who has written 16 curriculum books and published a guide to working with youth.