It’s easy to overlook your long-term goals in favor of just trying to figure out which bills get paid today. Your goals dictate how you manage your money. But, with good money management, you can change that. If your liabilities are more than your assets, your net worth is negative. Your liabilities include your credit card balances, student loans, car loans, mortgages, and other debts.When you subtract your liabilities from your assets, you get your net worth. Your assets include your bank accounts, investment accounts, retirement accounts, and property, like your house and car. The start of good money management requires you to know where you stand in terms of assets (things you own) and liabilities (amounts you owe). Any amount of money can prove to be too little if you don’t have good money management skills. Money management is not about saying “no” to every purchase, but developing a plan that lets you say “yes” to the things that are most important to you. Money management refers to how you handle all aspects of your finances, from making a budget for where each paycheck goes, to setting long-term goals, to picking investments that will help you to reach those goals.
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