Developing skills in money management

There are many aspects in money management that can be learnt. For a dedicated person who is willing to lead a better life with sound financials, there are plenty of resources that can guide through the intricate issues of financing, borrowing, credit, etc. What can be tricky to maintain, however, are the skills that become necessary in handling buying, selling or responding to pressure from salespeople.

These personal skills may be foreign to many people who are accustomed to such situations and therefore hard to apply naturally. Knowing what needs to be done can help, however. At least if you don’t know how to apply them, you can seek help from a professional or a friend.

The bottom line: Managing your money requires more than just diligence and good intentions. It sometimes takes a great deal of knowledge combined by the ability to bargain, ask tough questions and make simple analysis and research decisions on the spot. With that in mind, you may need help from one of the following:

The negotiator

In many countries and various markets, prices are set with room for bargaining. Whether you’re buying a car or a washing machine, you may be expected to haggle over the price. Many people are either uncomfortable with that approach or unable to do it. If you’re in a situation when a little bit of bargaining power can cut the price, it may be a good idea to seek the help of a friend who is familiar with the rules of the game.

Although negotiating a price isn’t really the same like money management, you should look at the bigger picture: If you consistently are paying more for your big-ticket purchases, you will probably end up with higher monthly payments and less money in the bank.

Finally, you — like many — may choose not to go down the bargaining path with or without help from others, accepting the occasional higher price. If that is your choice, ensure that your approach doesn’t expand to situations when you may be wronged. A higher price, a fine or a strange charge can simply be a mistake — or an intentional fault of dishonesty or fraud. So keep your eyes open for such situations.

The analyst

Many of us have a low aptitude for numbers and math. Even when you’re willing, you may find it hard to grasp some concepts such as interest rates, how debt is calculated or how a bank or any other lender is coming up with a payment plan. If you’ve tried and still found it difficult, seek help. Get a friend, a co-worker or a spouse to help.

If no such person is available or able to help and you’re dealing with a significant issue, a financial adviser may be the solution. In all cases, know what you’re getting yourself into — as much as possible. Ask for a detailed walk-through of whatever you’re buying or financing. And don’t take “no” for an answer. Even when things appear to be really good, you still have to know the details to make sure that the deal is realistic.

The backup

Buying a new house or financing a luxury car? Get a friend to tag along. It is not like you — or anyone — can’t make such a decision alone, but a second pair of eyes is always helpful. When you’re committing to some big purchase, you’re probably busy with all types of details combined with a great deal of excitement. That is a recipe for overlooking a critical detail or passing on a problem.

Because you want to make sure that your big purchase doesn’t end up a drag on your financials, ask this trusted friend to observe and tell you — honestly and instantly — if anything raises a red flag. Again, even the best money experts can get overwhelmed with details, so don’t underestimate an impartial view.

Rania Oteify, a former Gulf News Business Features Editor, is a Seattle-based editor.