This article is a continuation of last week’s; Last week, I shared three financial tips that will help you be financially stable; never sign a loan, make savings a habit and review your bank account transactions frequently. 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 and this leads to debt and stressful lives. We have to start learning 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 our expenses wisely. Learn to spend within your income 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, some of us will have to borrow money to meet our needs. But unhealthy debt can cause you serious problems that can affect your finances and therefore your life. Don’t borrow too much and if you do take a loan, make sure it’s within your limit and that you can pay it back easily.
Don’t give money you can’t afford to lose — Here is the rule for lending money to people; If you can’t lose it, don’t lend 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 not to expect your money back; this will save you the headache of chasing down someone to pay and prepare you financially for the worse.
Have an Emergency Fund — We never know what might happen to us and life (that is, job loss, car breakdown, etc.) happens to us at any time, so we should be prepared. An emergency fund is very important because it allows you to get by 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 have no assets or hardly enough money, it’s always good to seek advice about your finances. A financial advisor can help you identify your financial goals and guide you in the right direction 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 take control of your finances. In today’s world, financial literacy is more necessary than ever; Whether you are rich or poor, managing your finances is essential to a life of financial stability. I know it can be difficult at first to plan and live your life around your financial goals, but slowly, you will be able to make sure that every life choice you make brings you closer to your financial goals. If you’re still reading this, I’m going to assume you’ve decided to take your financial life more seriously, so start now!
Kelvin Mkwawa, MBA is a seasoned Banker. He can be contacted via email: [email protected]