This article is a continuation of last week’s article; Last week I shared three financial tips to help you stay financially stable; never sign a joint loan, make it a habit to save 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 Possibilities — It is well known that most of us spend more than we earn, 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 means planning our spending wisely, not buying less and cheaper things. Learn to spend within your income and you will avoid many money problems.
Don’t Lend Money You Can’t Pay — In an ideal world everyone would have enough money for their needs, but that is not the case, so some of us will have to borrow money to meet our needs. But unhealthy debt can cause serious problems that can affect your finances and therefore your life. Don’t over-borrow, and if you borrow, make sure it’s within your limit and you can easily repay it.
Don’t lend money you can’t afford to lose — Here is the basic rule of lending money to people; If you can’t afford to lose, don’t lend. For example, if someone wants to borrow money from you and you want to use it in the near future, don’t lend it. My advice when you decide to lend money 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 for the worse financially.
Have an Emergency Fund — We never know what might happen to us, and life (job loss, car breakdown, etc.) happens all the time, so we have to be prepared. An emergency fund is essential because it can sustain you 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 to cover your six (6) months of living expenses. It’s never too late to start building your emergency fund, so start saving now!
Search for a Financial Advisor — It’s always good to get advice on your finances, even when you have little or no assets. A financial advisor will help you set your financial goals and point you in the right direction on how to get there. Don’t wait until the crisis to get financial advice, do it now.
In conclusion, I want to reiterate that you don’t need to be rich to keep your finances under control. Financial literacy is needed more than ever in today’s world; Whether you are poor or rich, managing your finances is essential to maintaining your financial stability. I know it can be difficult in the beginning to plan and live your life according to your financial goals, but gradually you will be able to realize every life choice you make, which will bring you closer to your financial goals. If you’re still reading this, I assume you’ve decided to take your financial life more seriously, so get started now!
Kelvin Mkwawa is an MBA Experienced Banker. He can be contacted via his e-mail address: [email protected]