By Nethmie Dehigama   Whoever said money can’t solve all your problems probably did not have enough of it (as the saying goes). Contrary to popular belief, money is not the root of all evil, and neither are we terrible people for wanting to become rich or achieve millionaire status. Even if that is not your goal, money will always be an important aspect of life. I wish schools focused on teaching children how to handle money because once you start earning on your own, that’s when the fun begins (or misery… if you don’t build good money habits). We’ve put together a few habits that will help you when it comes to handling money.   

• Learn to save 

  You probably saw that coming. But then again, how many of us bust out cash each month after pay day and then complain about being broke by the end of the month? Set a percentage of your salary/income that you can save – for example, you could save 20%-30% depending on your expenses. To do this, you could set up an automatic transfer each month to your savings account. The rest can be divided into expenses and entertainment.    

• Live below your means

  As adults who try to keep up a social life, it’s so easy to live beyond our means, trying to keep up appearances that match up with others. But the thing is, in the long run, this is not sustainable (if your goal is to become a financially responsible individual). Many self-made millionaires started out this way – because it is the best way to build savings and ensure one does not fall into unnecessary debt.   

• Build your emergency fund

  An emergency fund is basically a separate savings account where you build it up to have the equivalent of about six months’ worth of living expenses. This can be used to cover unexpected events that may occur, like car and house repairs, or help you when you are in between jobs. Do not touch this account for anything else.  

• Invest, invest, invest

  I myself only recently started investing because that whole world was so daunting and intimidating to me. Learn about investment opportunities wherever you are because you do not want all of your money sitting in a savings account in the face of inflation; when the inflation rate is higher than the interest rate, you are losing money. Learn about the stock market, index funds, government bonds, fixed deposits, gold market, money market, real estate, and high-yield savings accounts, as well as the associated risks. Sri Lanka does not have some of these investment opportunities, sadly, but learn about it all so you are prepared. Also, do not forget to invest in yourself: your physical health, mental health, knowledge, and skills are essential to becoming good with your money. Also consider the fact that one of the best investments of your money could be investing in a business.   

• Try not to rack up debt as much as you can

  Debt is inevitable in one way or another but try to be as careful as possible. When spending with your credit card, ensure that you still stay within your budget. And always pay off your credit card bills on time, creating a good credit card payment history, while also not adding extra outflows of money with interest payments. Whatever debt you are getting into, ensure that you are able to make the monthly payments. Remember the rich use debt as leverage to grow wealth – but that is because they know how to grow their wealth using that debt in the long-term. What is important to note here is that we just need to better understand how money works.  

• Be a smart shopper

  You do not need that branded item. Period. There is no shame in going for marked-down items or avoiding certain things altogether. Determine what you truly need in life at this moment and stick to it. You are making a short-term sacrifice for long-term gains.  

• Develop your money mindset

  Lastly, but most importantly, you need to develop the mindset you want to have about money. A money mindset refers to the attitudes and feelings you have towards money as well as your relationship with it. Your mindset is currently influenced by past experiences, and the people in your life like your parents. If you have had a tough childhood where your parents struggled to make ends meet, you might view having enough money as something that is difficult to achieve. If people around you always talk about money as the root of all evil, then you might feel guilt the moment you have more money than you are used to. It is not easy to change a mindset when the reality in front of you is painful. But getting over that and shifting to an “I can make this work; I have the capability to make this work for me” attitude will make all the difference.  —----- Concluding paragraph Remember that you can have the life you want if you know what decisions to make. You can learn by example from others who have done it, or by trial and error. You have to first believe that you can reach your financial goals. I encourage you to learn more about all of these with whatever sources you can access.