This article is a continuation of last week’s one; Last week I shared three financial tips that will help you be financially stable; never co-sign a loan, make saving a habit and regularly review your bank account transactions. This week I’ll share five more personal finance tips that will change your life:
Spend within your means — It is common knowledge that most of us spend more than our income which leads to debt and 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; it does not mean buying less and cheap things, but rather planning 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 his/her needs, but this is not the case, so some of us will have to borrow money to meet our needs. But unhealthy loans can cause you serious problems that can affect your finances and therefore your life. Don’t borrow excessively and if you borrow, make sure it’s within your limit and can be paid back easily.
Don’t borrow money you can’t afford to lose — Here is the rule about lending money to people; If you can’t afford to lose it, don’t borrow it. For example, if someone wants to borrow money from you and you want to use that money in the near future, don’t borrow it. My advice when you decide to lend to someone is not to expect to get your money back; it 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 can happen to us and life (ie losing a job, car breaking down, etc.) happens to us at any time, so we need to be prepared. The emergency fund is very important because it can keep you afloat in a time 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!
Find a financial advisor — Even when you hardly have any assets or enough money, it is 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.
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 rich or poor, managing your finances is essential to having a life of financial stability. I know at the beginning it can be difficult to plan and live your life according to your financial goals, but slowly you will be able to ensure that every life choice you make brings 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 Mkwawa, MBA is a seasoned banker. He can be contacted by email address: [email protected]