Declare war on wasteful spending: How to manage finances effectively
Could the face of this terracotta warrier be that of someone like ancient Chinese military strategist Sun Tzu, who lived more than two thousand years ago? Not out of the question. But if it is, then what does it have to do with management of finance in the 21st century? And why should you care? Read on…
You’ve heard the phrase ‘know your enemy’. Its origin is within a document called The Art of War, written by Sun Tzu about 2,500 years ago.
His advice was, in translation: “If you know your enemies and know yourself, you will not be out at risk even in a hundred battles.”
Management of finance might seem to have little to do with ancient Chinese battles, but pause to think. How often do we use the word ‘battle’ in a modern sense, and apply it to just that topic?
We speak of people battling to avoid getting fat and battling to have some money left at the end of the month.
The battle is always an internal one, often involving head and heart; about constant skirmishes between the desire for an impulse purchase and the knowledge that you can’t afford it. The head says: “You don’t really need that top; those shoes; or that extra meal out. And you can’t afford it anyway…” The heart says: “Go on, it’s been a tough week; you deserve a treat; you can be careful with cash next week…” Come next week, the same mental battle is fought.
Where are your enemies?
And that’s why Sun Tzu’s advice is so important when it comes to knowing how to manage finances. These days your enemies are all around you. Advertising’s everywhere; on hoardings, on TV and radio, in supermarkets, and on the internet. The advertisers are no fools; they have years of practice in enticing your cash from your pocket into theirs in exchange for goods you don’t really need. No matter; they have made you want them, and ‘want’ and ‘need’ are very different.
Credit and debit cards are two more enemies. Using both, and the newly-emerging pay-by-phone technology. All three do the same thing: make it possible to spend money you don’t have, resulting in overdrafts and bills that will catch up with you eventually.
And where are your allies?
They’re within you, as Sun Tzu would no doubt have thought. The first is in knowing that you’re weak; the second in admitting it. The third is called discipline, and involves you setting a budget for management of finance in your life – because you’re in charge of that – and sticking to it.
Recording your spending is a huge ally, and that’s where cloud-based expense management software scores. Based on your smartphone, the Solo Expenses expense software is ready to record any spending, any time, anywhere (so long as you have a WiFi connection). For individuals, our Personal Use model is available as a free download here. This easy-to-use app takes away the anxiety and fear of not knowing where your money is being spent. Photograph receipts, key in amounts in whatever currency you need to use.
And where are the victories?
With spending carefully recorded (the software’s good, but you still need to tell it what to record) you’re then able to see the bigger picture with charts that show your spending habits and history. You can even export it all to Excel to see a detailed list of all your transactions!
With that done, you have a much better chance of knowing how to succeed with management of finance, and therefore being to save a little that will eventually let you own that pair of wonderful shoes…
Turns out Sun Tzu’s advice will have kept you clear of those internal enemies, and have led you to the victory of coming home with a shoebox under your arm. Ah the sweet taste of victory!
Picture: Elaine, via Flickr during an exhibition made possible by the Shaanxi Provincial Cultural Relics Bureau and the Museum of the Terra Cotta Warriors and Horses of Qin Shi Huang, Peoples’ Republic of China with the Houston Museum of Natural Science in cooperation with The Bowers Museum and National Geographic Museum.