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Money Management

Money management is the most complicated task in a business. Unless the money is properly utilised, we will lose many business opportunities and chances for earning profit. Whether the business is started with owned fund or borrowed fund, money management is equally important. If the business is starting with borrowed fund, the profitability of the business should be sufficient after paying borrowing cost. Loan installments should be paid very carefully. Any default in installment will create double burden to the business and it will continue to repeat and will reach in un controllable level at one stage.



In a business working capital management is also important and should be done carefully.

Working Capital Management
A managerial accounting strategy focusing on maintaining efficient levels of both components of working capital, current assets and current liabilities, in respect to each other. Working capital management ensures a company has sufficient cash flow in order to meet its short-term debt obligations and operating expenses.

Money Management
Money management or Investment Management is the process of managing money which includes investment, budgeting, banking and taxes. It is a strategic technique employed at making money yield the highest of interest-yielding value for any amount of it spent. The idea of money management techniques is developed to plummet the amount individual, firm and institutions spends on items that add no significant value to its living standard, long-term portfolios and asset-basins. The following are powerful techniques that can be employed in making every expense made to be worth it:

a. Cutting the budget on social needs
b. Avoid snobbery appealing expenses
c. Always opt the most cost-effective alternative
d. Increase expenses more on interest bearing item than any other thing
e. Establish the expected benefits of every desired expense using the canon of plus/minus/nil to standard of living value system.

These techniques are investment-boosting and portfolio-multiplying.

Money management is used in Investment management and deals with the question of how much risk a decision maker should take in situations where uncertainty is present. More precisely what percentage or what part of the decision maker's wealth should be put into risk in order to maximize the decision maker's utility function.

Money management gives practical advice among others for gambling and for stock trading as well.

Money management can mean gaining greater control over outgoings and incomings, both in personal and business perspective. Greater money management can be achieved by establishing budgets and analysing costs and income etc.

Learning effective money management not only enables you to live comfortably within your means, but also helps you to increase your wealth. Use these money management tips to stay in control of your money.
Learning effective money management not only enables you to live comfortably within your means, but also helps you to increase your wealth. Use these money management tips to stay in control of your money!

Set a Money Management Goal
Money management is a means to an end. However, make sure your goal practical and be sure the "end" is in clear sight. Although your money management goal may be to have a comfortable retirement, start small with objectives like paying off a credit card within X number of months or saving $X by the end of the year. In money management, like in any regimen, there's nothing like the satisfaction of success to keep you on track.


Know what you have
Before you can live within your means, you need to know what your means are. Start money management by taking stock of your money. You'll probably be surprised at how rich you really are!

Although our money is an asset and all of our assets are types of our money, generally we're more inclined to think of assets as property.
However although all of our possessions are parts of our wealth that we can turn into cash, usually we want to protect these possessions from creditors.

Some assets like vehicles and appliances depreciate (decrease in value) over time. Yet, while they don't increase spending power, you can turn them into cash.

Long-term assets like real estate holdings, investments in stocks, bonds, etc and personal property such as collections, artworks, and antiques appreciate  over time and actually enable us to save money and increase our wealth.



Track your income
Really track your income! If you have at least a month's worth of old check stubs, add them up and divide them to see what your average income is.

Track your spending
Once you know what money you have now and what income you can expect to get, it's time to find out where your money goes. Take a month and track your spending down to the penny.

Record everything
In addition to tracking the cash you spend, record every bill payment, check, debit, and credit card expenditure. 

Setting a realistic goal, knowing what you have, what you expect to earn, and tracking your spending are the basics of money management that enable you to control your money and make wise budgeting choices in the future.

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