Think three moves ahead.
The phrase is synonymous to playing chess but should apply to every aspect of one’s life. Your financial life won’t be improved by being arbitrary. Whether you’re planning on taking out a personal loan or using your credit card, you should always know what these decisions would lead to and how you would deal with those consequences. Managing your money rests a lot on proper planning. Don’t just have a single plan for your finances, have a plan that you will implement after your initial plan has succeeded, and have a series of contingency plans if your initial plan fails. Only by anticipating every possible outcome and being prepared for each of those outcomes can you secure a victory in chess and finance.
Work both sides of your game.
The really great chess players can effectively play both offensively and defensively. Whether it’s using the white pieces or black pieces, an astute player takes advantage of any and every position in the game, whether placed there intentionally or not. The same applies to your personal financial management. Some people are just good at saving and investing their money but can’t seem to find a way to earn more money. Some can earn a lot of money but are unable to properly budget that money. Don’t just be good at making money. Be sure you’re also adept at saving and investing money, even at budgeting money, and managing money. Improve every aspect of your financial game. By attempting to be well rounded, you can identify which areas of your personal financial management style need work and you can definitely improve on those areas.
Know when to sacrifice.
In chess, you’ll sometimes find yourself in situations wherein you need to sacrifice valued pieces in order to achieve desired results. Managing your finances is the same. Sometimes, you’re going to find yourself in predicaments that only a sacrifice can get you out of. Don’t hesitate to make the proper sacrifices if it means a much more important achievement comes to you down the line.
A well-crafted plan of attack or counterattack fails if a player doesn’t have the patience to wait until the proper time to execute that plan. All good plans rely on proper timing in order to work perfectly. Patience is the key to success in chess and finance. Waiting for your opening, knowing your opportunity will come and ensuring that whatever opportunity to unleash your game plan is not wasted goes a long way in ensuring your success. The same way chess players wonder if “is it the right time to perform castling” or “is it the right time to sacrifice my queen,” when it comes to your finances, always consider timing. Is this the right time to take out a personal loan or should you wait? Is this the right time to use your credit card? Always practice patience, and you’ll see the right time come.
Know how to maximise your resources.
Sometimes in chess, you’re forced to play at a disadvantage. You’re bound to make mistakes form time to time, and there are occasions where that lead to situations wherein your pieces are outnumbered and your movements are limited. Chess players thrive on control, but also know how to make do with situations when their initial plan doesn’t work. With fewer pieces on the board, they still try to find a way to win.
In your personal financial management, try to maximise your resources, limited as they might seem to you. There’s always a way to win, and it’s up to you to find it. Learn to use whatever you have, be it a single credit card or a meager income. Your financial success isn’t limited with your lack of resources, but rather with what you end up doing with those resources.
Chess and finance are very similar in terms of the need to establish the proper mindset and practice a level of discipline in order to succeed. Look at your money as chess pieces, and your financial life as a chessboard, with debt and other bad things as your opponent. Make the right moves and you’ll be sure to win at the game of finance.