"Wealth is not what you earn, but what you don't spend."
Henry Ford
Every day is a traditional routine… You go to work. You work tirelessly. Sometimes more than others. Sometimes unappreciated. On the way home, you browse social media to kill time. It turns out that your relative is moving to a new apartment. Your neighbor also got a new car. It turns out that a friend is going on a trip. And a former colleague started a business with the experience you gained from your experience… You all rejoice in your success and shower them with congratulatory texts. However, deep down, you have a question: how did they manage it?… You work just as hard, you studied better than others, why can’t you save money? You even find your own excuse: others don’t have to raise a large family alone like you, you’re not particularly lucky, you’re not stingy, you have more expenses. Whatever the answer, they are all true, although there may (not always) be another answer that you don't dare to answer deep down: "You don't know how to manage money."
When we talk about the golden rules of making money , perhaps the first thing that comes to mind is qualified education, hard work, luck, or influential surroundings. However, if we look around, we will recall many examples of personal financial success, when behind this success there was neither a diploma from leading universities, nor an influential circle, nor special luck. And if hard work is the only reason, why are you unable to accumulate money when you work with no less determination?
Making money is a talent, but managing it is an even greater talent. In the first case, fortune may happen to be on your side, in the second case, you will have to rely only on your own habits, inclinations, and skills.
And what are these skills that help us first earn money and then manage it?
1. Goal setting ability
Set goals. They will tell you what to consider, how much money you need to realize it, what means you can use to raise it, where and when. Without clear goals, there is a risk of getting distracted and wasting financial resources in the wrong direction.
2. Planning skills
Draw up an action plan. This will allow you to allocate funds correctly. Planning is preceded by information search and analysis, which is a laborious task and many avoid it. But keep in mind: unplanned and spontaneous steps, manipulation at the first opportunity and hasty purchases will cost you much more money than in the case of prior planning, information search and analysis.
3. Ability to prioritize
We often underestimate our own capabilities or circumstances and think we can handle everything at once. Then we become victims of stress, lack of motivation, procrastination, and attempts to delegate. Postponing or delegating often results in additional personnel or other unforeseen costs, or as a result, we get undesirable quality, which also requires additional resources to correct.
4. Savings ability
If we believe Francis Bacon* , "There are many ways to get rich. Saving is the best of them."
Be careful with your money. Give up your temptations and wasteful habits. And if you think that it is unfair to accuse you of wastefulness, because you do not have any money to save for a completely different reason, e.g. due to low income or high household or other necessary expenses, or you already live extremely frugally, keep in mind: even one saved lari will turn into 10 lari one day, then into 100 lari, etc. Save even small amounts.
Let's be more specific:
If you decide to turn your experience and knowledge into a business, start by setting a goal. Ask yourself the question from the very beginning: Am I ready for this? Have I understood all the challenges that lie ahead in my work? If you find out halfway through that you have to say “no” and abandon everything, the expenses incurred so far will be in vain. No, and they could have been used for other goals, such as traveling or acquiring a new profession, if you had set the right goal at the right time. You approach a correctly chosen goal with more enthusiasm and diligence. And a job done with determination also brings financial success more easily.
If your answer is “yes”, start planning your steps. First, study the consumer market, potential segment, and competitors. Access channels to production facilities, sales channels, human resources, all estimated costs and opportunities for their optimization, available opportunities to deepen industry knowledge. Keep in mind that at the initial stage you will not have the financial ability to delegate all aspects of the work to hired staff, which means that you will have to do work yourself in different directions. Be prepared to be more or less familiar with finance, marketing, management, and the business itself in which you are starting a business. There are many free ways to find knowledge and information. For example, books and the Internet. With pre-prepared stages and information, there is less likelihood of making mistakes. And mistakes often cost us dearly. In the literal sense of the word.
Prioritize. It is impossible to prioritize the search for sales channels if you do not first know who the consumer segment for your products will be and do not study in detail their needs and expectations for your product or service. Accordingly, you will not have to incur production costs and create a product and sell it in a pre-rented retail outlet that the consumer will not like.
Finally, try to avoid additional expenses by saving. For example, if you have free time, don't be lazy or lazy to do certain tasks yourself that you would otherwise hire and pay someone else to do. Learn to save a little.
You can approach travel, buying a home, and other life issues with the same principles.
So if you're wondering how to manage your money, make the skills listed above a way of life. And if you're wondering how to make money, no one can answer you better than Henry Ford: Don't spend it unwisely.
* Francis Bacon – English philosopher, historian and political figure.
* Henry Ford – American billionaire businessman
