Money generally is not everything, but today, the absence of money in our daily lives has limited many from achieving their dreamed goals.
The Fact that you need Money for almost everything in life is quite the pain, but like they say Money doesn't bring happiness.
Do you agree?
SOURCE
in as much as we want to believe that there are reasons to still believe money Sponsors happiness to a degree.
and both Small and Great might need a great sum of it.
Everyone including,
Individual and Public Sectors living one way or another, have witnessed one form of devastation or another for lack of money, which in some cases could be as a result for lack of financial prudence.
Financial prudence cannot come to play except one is imbued with principle of financial handling. Having said this, the next thing that comes to mind is the source of finance.
Following are Basic Sources of Finance :- ** Earning**, Saving, Investment, Borrowing, Reduce spending.
coming to talk about prudential handling is to apply the principles of handling and sustaining on the above basic sources.
Finances are earned from services rendered either directly or indirectly as salaries or other forms of contract execution. It could also be in the form of profit from sales or interest from investment. Have such brings finance and how it is being spent spell whether is done prudently or not. Most of the times planning before spending is the part way to prudence. Many buys or spend without planning such spending most at times spell doom for spenders as sometimes it amounts to waste or buying what is not needed. Some others, especially big organizations call planning and budgeting. People that budget before spending tend to be extra careful more than random buyers. Money tends to stay longer in the hands of planners than non- planners and planners lived financially sustained lives than un-planners.
Saving is simply keeping money aside for future need and use. Saving lifestyle is prudent lifestyle. There will always be a rainy day, probably when salary is no longer earned, when there will be no contract to execute, when there is no strength to hustle from one corner to another. When one becomes weak as a response to the call of nature, your savings become your source of finance and source sustenance. Many who lack prudency in the hay days become potential lacks and may face difficulties. So saving is not just a source of finance but a prudent way of handling finance.
Investment: Is another face of saving but in this case the motive may be different as most investments are tended towards building wealth to increase in profit from hard earned money . Profit making is a method of increasing earning, such profit could be interest from stock trading, interest from banks fixed deposit, money market account and so on.
Borrowing: as source finance is not a prudent method of financial earning except it is purely for an investment that will yield high interest. Principle of prudent handling should be that both the interest accrual to the borrowing and the interest accrual to the investment should be weighed properly so that the borrower will be at advantage of having more profit than paying more interest to his lender and such it is at best to borrow for investment instead of borrowing for consumption. Such an investment could be a long-term high yielding profit or short-term high yielding profit.
Spending: is where those who are prudent in money financial management are discovered, failed financial managers are also discovered when it comes to spending. The worst set are financial wasters. When you buy you are paying for something but what is the value of what you are paying for. Why will I buy because my friend is buying what that good has no value or use for me? Why should I buy any brand of car manufactured when I am not going to use it or when the one, I have is in good other. Why should I embark on expensive travel when there are several cheap safe options. Some of the window shopping that people engage themselves in is uncalled for and it is because of lack of financial prudency. Many people buy not because it meets their needs but in competition and that is a waste of funds that could be channeled into other valuable and useful ventures. Why will some park up to cars in his house for himself and wife. only. Lack of financial prudency mostly result in financial mismanagement. Spending money meant for something on another thing is proof of lack of prudency.
In Summary, financial prudency entails application of financial literacy, principles, and wisdom to maintain, sustain, and keep the volume of finance in your custody, increase or maintain the measure of investment with depletion to liquidation or being broke. It goes beyond having daily liquid cash flow, it encompasses the value of what money is being spent on and your bargaining and purchasing power. Financial prudency exhibits positivity and not negativity in season and out of season.
