This article is a continuation of last week’s; Last week I shared three financial tips to help you be financially stable; never co-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 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 how to spend within our means; this does not mean that we buy less and cheap things, but that we plan our spending wisely. Learn 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 their needs, but this is not the case, so some of us will have to borrow money to meet our needs. But unhealthy borrowing can cause you serious problems that can affect your finances and therefore your life. Don’t borrow too much and if you do, make sure it’s within your limit and that you can easily repay it.
Don’t lend money you can’t afford to lose — Here are the rules about lending money to people; If you can’t afford to lose it, don’t borrow 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 don’t expect to get your money back; this will save you the headache of chasing someone to pay you back and prepare you financially for the worst.
Have an emergency fund — We never know what could happen to us and life happens to us (ie job loss, car breakdown, etc.) at any time, so we need to be prepared. An emergency fund is very important because it can keep you afloat in times 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 will cover 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 hardly 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 guide you in the right direction to reach them. Don’t wait until you’re in a crisis to seek financial advice, do it now.
In closing, 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 financial stability in life. I know it might be difficult at first to plan and live your life around your financial goals, but slowly you will be able to ensure that every life choice you make will bring you closer to your financial goals. If you’re still reading this, I’m going to assume that you’ve decided to take your financial life more seriously, so start now!
Kelvin Mkwava, MBA is an experienced banker. He can be contacted through the email address: [email protected]