This article is a continuation of last week; Last week I shared three financial tips to help you become financially stable; never sign a loan, make savings a habit and review your bank account transactions frequently. This week, I’m sharing five more personal finance tips that will change your life:
Spend within your means – It is known that most of us spend more than our income, which leads to debt and stressful life. We must learn how to live within our means; most of us are not used to living within our means. We can learn how to spend within our means; This does not mean buying less and cheaper things, but planning your expenses wisely. Learn to spend within your income and you will avoid many money problems.
Money you can’t borrow – In an ideal world, everyone would have enough money for their needs, but this is not the case, so some of us need to borrow money to meet our needs. But bad borrowing can cause serious problems that affect your finances and therefore your life. Don’t borrow too much, and if you do, make sure it’s within your limits and you can pay it back easily.
Don’t lend money you can’t afford to lose – Here is the rule of lending money to people; If you can’t afford to lose it, don’t lend it. For example, if someone wants to borrow money from you and you want to use the money in the near future, don’t lend it. My advice, when you decide to lend someone money, don’t expect your money back; this will save you the headache of chasing someone down to pay you back and prepare you for the worst financial situation.
Have an emergency fund – We never know what can happen to us, and life (ie, job loss, car breakdown, etc.) will happen to us, so we need to be prepared. An emergency fund is very important because it can keep you going 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 covers six (6) months of your living expenses. It’s never too late to start building your emergency fund, so start saving now!
Find a financial advisor — Even when you don’t have enough assets or money, it’s always a good idea to ask for advice about your finances. A financial advisor will help you define your financial goals and guide you in the right direction to achieve them. Don’t wait until you’re in a crisis to get financial advice, do it now.
In conclusion, I want to reiterate that you don’t have to be rich to take control of your finances. In today’s world, financial literacy is more important than ever; Whether you are poor or rich, managing your finances is essential to ensuring a stable financial life. I know it can be difficult at first to plan and live according to your financial goals, but little by little you can make every life choice you make that will bring you closer to your financial goals. If you are still reading this, I would like to assume that you have decided to take your financial life seriously, so start now!
Kelvin Mkwawa, MBA is an experienced banker. He can be contacted by email at: [email protected]