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Things that You Should Know about Your Money

Updated on August 14, 2012

In terms of money, banks and other money agency will love you. They like to make business with you and sometimes take that money away from you. Isn't that a surprised? Definitely not. When it comes to money, everybody will comes to you when your pocket is full. But when you are short- this is the time when you know who are your real friends and who are not.

Asset and Liability

When it comes to asset and liability, this is a serious subject. It is something that we should seriously taking into a matter of great consideration. Lets define this terms one by one, shall we?

Asset, in simple terms is anything that gives you money.

Aren't we all love things that give us money? Examples of assets are:

  • Investments. What are your investments? Your precious gems and jewelries can be term as your investments. Who knows that in the long run, you will sell it when you are in a tight budget. Mutual funds , stock, bonds and other things such as your expensive collections: paintings, and others are examples of your investments.
  • Your jobs is your asset. It gives you your monthly income that help you pay your bills.
  • And your profitable business.

Your asset is your livelihood. It is your bread and butter that you should be aware of and be thankful for.

Explaining Liability

Liability in layman's term, is something that takes money away from you. And this is the serious matter that you should be careful about, because it takes away your asset.

Now, what are your liabilities?

  • Your car

Although, car is a necessity, it is undeniable that it becomes a liability because you have to spend much money for the gas, pay for your monthly insurance and also you have to pay for the mechanic when your car is in trouble. This is the reason why you can't save. Instead of putting your money into savings, you are spending it to your car.

  • Vices and addiction

What are your vices? Shopping? Gambling? These are expensive vices. Shopping is the number one weakness for most women. And we all know that gambling will leave us begging and knocking on our neighbor's door.

Eating out often is also one liability that takes away your asset. Fast food centers and restaurants are the one who get rich and not you. Spending too much money everyday for your lunch break isn't helpful. If you put that money into savings, you will be amazed how much money you will save at the end of the month.

  • Expensive hobbies and recreational activities.

Do you watch movies often? How much money do you spend by watching movies in a month? Having said this, it raised much awareness on my part. I loved movies and I liked going to theater. But, the money I have to spend for the movies might help to grow my savings. So- when I calculated my movie spending habit, I was shock how much money I lost just by paying tickets.

What about you? What are your hobbies? There are two types though: Hobbies that takes away money and hobbies that gives you money. So better choose the one that gives you money. It is a wise choice, isn't it?

Three Practical Things to Remember to not overspend:

  1. Know the things that you need to buy. It all comes down to your need. Which means, if you want it but you don't need it. Then, do not buy it. Your need should come first before your wants.
  2. Know your monthly income. Then, spend less. Do not spend more that exceed to your monthly income.
  3. Lists all the things that you spend. Have a mini-notebook and try to list all those spending habits for the month. Calculate and evaluate, in order for you to know what are the things that you don't need to buy in the coming months.


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