This story is a continuation of last week’s; Last week I shared three financial tips that will help you stay financially stable; Don’t ever take out a loan, make savings a habit, and check your bank account transactions frequently. This week, I’m going to share five more life-changing financial tips:
Spend within your budget – It is well known that most of us spend more than we earn which leads to debt and stressful life. We need to start learning how to live within our means; Most of us do not live within our means. We can learn how to spend money with the money we have; This does not mean buying cheap things but planning our spending wisely. Learn how to invest in your money and you will avoid many financial problems.
Don’t borrow money you can’t afford — In a good world, everyone will have enough money for their needs, otherwise some of us will want to borrow money to meet our needs. But taking a bad loan can cause you serious problems that can affect your finances as well as your life. Don’t borrow too much and if you do borrow, make sure it’s within your means and you can pay it back quickly.
Don’t borrow money you can’t afford — This is the law of lending money to people; If you can’t afford to lose it, don’t borrow it. For example, if someone wants to lend you money and you want to use the money in the near future, don’t turn it on. My advice when deciding to lend money is not to expect to get your money back; This will save you the headache of finding someone to pay you and prepare you for the financial crisis.
Have an Emergency Fund — We never know what can happen to us in life (ie, unemployment, car breakdown, etc.) where we are at any time so we should be prepared. The emergency fund is very important because it can keep you running in times of need without relying on expensive 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 don’t have enough assets or money, it’s always good to seek financial advice. 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 problem 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 money. In today’s world, financial literacy is required more than ever; whether you are poor or rich, managing your money is important to achieving a financially stable life. I know in the beginning it can be difficult to organize and live your life according to your financial goals, but slowly, you will be able to see that every life choice you make, brings you closer to your financial goals. If you are still reading this, I want to assume that you have decided to take your financial life seriously, so start now!
Kelvin Mkwawa, MBA is a Seasoned Banker. He can be contacted through the email address: [email protected]