This article is a continuation of last week’s; Last week I shared three financial tips that will help you be financially stable; never sign a loan, make saving a habit, and review your bank account transactions often. This week, I’m going to share five more personal finance tips that will change your life:
Spend Within Your Means — It is well known that most of us spend more than our income which leads to debt and a stressful life. We must begin to learn how to live within our means; most of us are not used to living within our income. We can learn how to spend within our means; this does not mean that we buy less and cheap things but rather we plan our spending wisely. Learn to spend within your income and avoid many money problems.
Don’t borrow money you can’t afford — In an ideal world, everyone would have enough money for his/her needs but this is not the case and therefore some of us will need to borrow money to meet our needs. But unhealthy loans can cause serious problems in such a way that they can affect your finances and therefore your life. Don’t borrow excessively and if you do, make sure you are within your limit and can pay it back easily.
Don’t Lend Money You Can’t Afford to Lose — Here is the general rule about lending money to people; If you can’t afford to lose it, don’t lend it. For example, if someone wants to borrow some money from you and you want to use that money in the near future, don’t lend it. My advice when you decide to lend someone is not to expect to get your money back; this will save you the headache of chasing someone to pay you back and prepare you for the worst financially.
Have an Emergency Fund — We never know what can happen to us and life happens to us (ie job loss, car breakdown, etc.) at any time so we should be prepared. An emergency fund is very important because it can keep you afloat in a time of need without having to rely on expensive short-term loans. So how much should you save for your emergency fund? A good rule of thumb is to have an emergency fund that covers six (6) months of your living expenses. It’s never too late to start building your emergency fund so start saving now!
Look for a Financial Advisor — Even when you barely have any assets or enough money, it’s always good to seek advice about your finances. A financial advisor will help you identify your financial goals and steer you in the right direction on how to get there. Don’t wait until you have a crisis to seek financial advice, do it now.
To conclude, I want to reiterate that you don’t have to be rich to be in control of your finances. In today’s World, financial literacy is needed more than ever; whether you are poor or rich, managing your finances is imperative to having a life of financial stability. I know that in the beginning it can be difficult to plan and live your life according to your financial goals, but gradually you will be able to ensure that every life choice you make, brings you closer to your financial goals. If you are still reading this, I must assume that you have decided to take your financial life more seriously, so start now!
Kelvin Mkwawa, MBA is a Seasoned Banker. He can be contacted via the email address: [email protected]
