The concept of money for life

Isola Moses

Money is no doubt vital to continued human existence on the planet earth. Having it is one of the biggest steps towards leading an independent life and achieving financial independence.

But what is money? It is a medium of exchange. What does it do? It ensures the success of exchange by being the one item on offer that is ALWAYS acceptable.

Why is it necessary? Because human beings must exchange to live together in peace, and to prosper. How important was the discovery of the idea of money? Look around you.

That covers the concept or idea of money. But an idea, as such, does not exist as a physical entity. Money must be a physical entity.

Neither the “electronic” money of today nor the notes and coin which circulate as cash has any official or legal connection with Gold and Silver. But they once did, and most people think that they still do. As long as that situation persists, the modern monetary system will function.

Money is, therefore, necessary to live and live well in our society, but you don’t need a lot of money to be independent, successful, and happy.

You do need to know how to manage the money you have and make it work for you. And that is why you need some measure of knowledge of personal financial management.

This means taking control of your money -both the money that you earn and the money that you spend. This is what is meant when we mention some of the most important elements of finance: Understanding where your money comes from (your income), where your money goes (taxes and expenses), and how you can manage that money (budgeting and saving.)

Consequently, as it is in every other worthwhile facet of human endeavour, importance of financial planning in the life of an individual cannot be over-emphasised. It is significant in any aspect of human activities

How important is money in your life as an individual?

A great philosopher once said: “Money is a barrier against all possible evils.” But do you think it actually is as submitted by the philosopher? Let us explore and expand on this thought.

Yes, money can prevent the sufferings that come with poverty such as cold and hunger. While sickness cannot be totally obliterated by money, it can be considerably relieved by it. Giving away money to charity can also provide us with the satisfaction of relieving others from suffering.

With money, we can obtain an advanced education that may aid one in the development of genius and extraordinary achievements. It gives us the leisure to devote a part of our time to culture and art. Money can provide a powerful diversion for all or our troubles by permitting distraction from the anxieties that assail us.

So, we must try to get a thorough understanding of all that we may possibly do, in an honourable and legitimate way, to conserve wealth. Even to those who have inherited wealth, idleness can be a certain cause of ruin.

A great fortune needs genuine labour for efficient administration. Those who leave this duty to strangers may pay a penalty for their negligence. This is why a rich man, who wants to preserve and increase his fortune, should be his own business manager.

Even artists must know the price that their work is worth. It is necessary for the artist to be a businessman in order to have the right to be a genius. History is full of examples of this.

Great playwright and poet William Shakespeare (1564─1616) laboured as a theatre manager to obtain the necessary leisure to produce his dramatic masterpieces. Thomas Edison (1847─1931) worked as a telegraph operator to pay the bills while he “moonlighted” as an inventor.

From the bottom to the top of the ladder, it is necessary to amass money in order to apply it to some great cause. Money is the means by which we may fulfil our purpose in a larger and better way.

Arguments in favour of significance of money to humans

Many have described money is the most important thing in life. They have based their conclusion on the following:

  • Everything in modern society is based on money. As the saying goes, money makes the world go around.
  • Parents object to their daughters’ marriages unless their future sons in-laws have jobs with good prospects.
  • Many young people marry for money rather than love. Security is more important than happiness.
  • Some people in several parts of the globe would even trade their self-esteem for money.
  • Materialism influences education, too. Students acquire knowledge not for its own sake, but usually for a bigger wage.
  • Students choose business courses rather than liberal arts for the sake of earning big money in the future.
  • Very few people want to be teachers because teaching is not a lucrative profession.
  • More emphasis is put on material life than on spiritual life in modern society. People do anything in their power to earn money to buy their houses, furniture, cars, etc.
  • People are trained to be acquisitive from an early age, and are not considered successful unless they make good money.
  • People spend most of their lives struggling frantically to keep up with their neighbours.
  • Wealthy nations can succeed by offering their poorer talented neighbours bigger salaries.
  • Financial rewards for pop stars make many people envy them.
  • A desire to earn more money is nothing to be ashamed of.
  • Being poor is not very much fun.
  • Being rich allows you to do what you want.
  • If you are rich, many people want you for a friend.
  • It is easier to marry well if you are wealthy.
  • Being wealthy allows you to enjoy life to the full.
  • The man who has the money makes the rules.

Without mincing words, therefore, everyone should, in his or her own way, make an effort to amass some money. Some will apply money to their daily wants.

Others seek to swell the fortune that they desire to leave to their children. Some only desire money so they can devote it to some noble enterprise or charity. Finally, a large number of people see money chiefly as a means of immediate gratification.

Whatever the reason, however, everyone who is capable of earning money should learn how to manage it properly in order to ensure that they will have enough of it to apply to the causes that they choose.

Personal financial planning process

Personal financial planning is key to attaining financial independence by an individual.

However, it would be relevant to ask what really a financial plan is, and why does one need one to achieve financial freedom.

Again, personal finance is the application of the principles of finance to the monetary decisions of an individual or family unit.

It addresses the ways in which individuals or families obtain, budget, save and spend monetary resources over time, taking into account various financial risks and future life events.

Components of personal finance might include checking and savings accounts, credit cards and consumer loans, investments in the stock market, retirement plans, social security benefits, insurance policies, and income tax management.

A significant component of personal finance is financial planning, a dynamic process that requires regular monitoring and re-evaluation. In general, it has five steps as follows:

Assessment: One’s personal financial situation can be assessed by compiling simplified versions of financial balance sheets and income statements. A personal balance sheet lists the values of personal assets (e.g., car, house, clothes, stocks, bank account), along with personal liabilities (e.g., credit card debt, bank loan, mortgage). A personal income statement lists personal income and expenses.

Setting goals: It is not uncommon to have several goals, some short term and some long term. Setting financial goals helps direct financial planning.

Creating a plan: The financial plan details how to accomplish your goals. It could include, for example, reducing unnecessary expenses, increasing one’s employment income, or investing in the stock market.

Execution: Execution of one’s personal financial plan often requires discipline and perseverance. Many people obtain assistance from professionals such as accountants, financial planners, investment advisers, and lawyers.

Monitoring and reassessment: As time passes, one’s personal financial plan must be monitored for possible adjustments or reassessments.

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