The skill of managing money is really important yet still completely ignored. People put in the effort to earn money but in the end most of them don’t have money saved up, or even have a plan for the future which includes investments. The issue is more than just earning money. It goes deeper into one’s culture, spending emotionally, and the absence of financial education. With better awareness and discipline, higher money earnings can mean securing your financial position. Few reasons are as below:
Low Saving and Investing Habits
Many people in developing economy use cash-based transactions. People prefer to keep money at home instead of in banks. This results in:
- Money disappearing quickly
- No growth because the money is not invested properly
- Vulnerable in emergencies because they don’t have access to that money
Emotional Spending
Money is not just about numbers; it is about psychology. People end up overspending because of emotional issues like stress. People buy things to feel better in the moment, which is like slow poisoning oneself. It is not good in the long run.
Misunderstanding – More Income = Freedom
The general misunderstanding is that if they earn more money, they can solve all their financial problems. However, in reality:
- If people earn more money, they end up spending more if they do not have financial discipline
- Financial education is the way to turn income into wealth
Essential Money Management Skills Everyone Should Master
Figuring out why most Nepalis have difficulty managing their finances is only the first part. The other part is the learning and practicing of crucial money management skills that can convert daily routines into sustainable long-term stability. These skills are not rocket science. They are simple, practical strategies that can be employed by anyone to save better, spend better, and invest better. More about these skills will be discussed below.
Budget your monthly income
Track how much money you earn and how much you spend. List all sources of income and record every expense for one month. Categorize your expenses into needs, wants, and savings.
Budgeting helps you understand where your money actually goes and prevents overspending. Once you know your spending patterns, you can make smarter choices and prevent your money from draining before the end of the month. Budget 360 features on Global Smart plus enable you to manage the money smartly. Using this feature you can know the spending habits and create a monthly budget.
Build an emergency fund
Use the 3–6 month rule for your emergency fund. This helps you cover unexpected costs such as medical bills, car repairs, and household emergencies.
An emergency fund protects you from financial crises and stress. It helps you avoid loan debt and supports you until you become financially stable again.
Use loans smartly
Loans should be used only if required, not for want-based things like lifestyles.
Unnecessary purchases using loans can put you in debt for a long time. When you take loans for things because of your wants not needs, you end up paying more due to interest. Good borrowing habits ensure that your future income is secure and that you remain financially stable. According to the needs, Global IME bank provides loans for personal use, business use.
Start basic investing
One of the key ways to increase money is by investing. Even small investments can increase money in the long run, like investing in mutual funds or government bonds.
If you only save money, inflation gradually reduces its value over time. Investing helps your money grow and beat inflation. Starting early, even with small amounts, benefits you in the long term. Over time, your money grows on its own. Using Global Smart plus you can apply for an IPO as an investment opportunity.
Retirement Planning
Retirement planning is a long-term money management skill. It is not something meant only for old age because in Nepal many people depend on their children later in life, which is risky. The best approach is to start saving and investing early, no matter the amount. You need to understand how EPF and pension work if you are in a job, and create your own retirement fund if you are self-employed or working abroad. For those already in their senior years, Global IME Bank offers a supportive option Global Jestha Nagarik Bachat Khata offering higher interest rates.
