This article follows on from last week’s; Last week I shared three financial tips that will help you be financially stable; never co-sign a loan, make a savings habit, and review your bank account transactions frequently. This week, I’ll 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 means. We can learn to spend within our means; this does not mean buying less things and cheap things but planning our spending wisely. Learn how to spend within your means and you will avoid many money problems.
Don’t Borrow Money You Can’t Afford — In an ideal world, everyone would have enough money for his or her needs but that is not the case so some of us will have to borrow money to meet our needs. But unhealthy borrowing can cause serious problems for you in that it can affect your finances and your life as a result. Don’t over borrow and if you do get a loan, make sure it is within your limit and can be easily repaid.
Don’t Lend Money You Can’t Lose — This is the general rule for 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 to someone is not to expect to get your money back; this will save you the headache of looking for someone to pay you back and prepare you for worse financial situations.
Have an Emergency Fund — We never know what might happen to us and life (ie losing a job, car breakdown, etc.) happens to us at any time so we should be prepared. The emergency fund is very important because it can keep you afloat in times of need without relying 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 will cover six (6) months of your living expenses. It’s never too late to start building your emergency fund so start saving now!
Seek a Financial Adviser — Even when you hardly have assets or enough money, it is always good to seek advice on your finances. A financial advisor will help you identify your financial goals and guide 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.
Finally, 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 essential to living a life of financial stability. I know at first it can be difficult to plan and live your life according to your financial goals, but slowly you will be able to make sure that every life choice you make will bring you closer to your financial goals. If you are still reading this, I would 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 by email: [email protected]