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Managing Your Finances

By – Pleasure Chizoba

savings

Finance is rarely mentioned but felt daily. The effects are often talked about in a manner of dejection or self-defense. A lot of people have become so irresponsible when it comes to finance with a lot of excuses that yield enough frustration. Finance is a very important issue to deal with but I’ll try my best to buttress my points.

In general, we are not taught in any formal framework how to keep money or grow itbasic personal finance skills are difficult to learn. We must dismiss this idea that we will always make more money. We all have a finite amount of productive years to work; many people will never be as agile both mentally and physically as they are now. What happens in thirty years when you can no longer work as hard and have no cushion to fall back on? Poverty and dependence on others is inevitable. In order to build wealth, this mentality has to change. Developing a wealthy mindset requires the understanding of the concept that the way you spend, invest, and manage ten naira is the way you’ll spend, invest, and manage ten million.

These few points will help in managing your finances well.

  • Track your expenses Most people don’t know where the money they earn goes. What percentage of your income goes to food? Transportation? Clothes? It is important to track the expenses in our personal lives. It is also advisable that we budget(monthly) even before the money comes. We have to learn to spend with intention by allocating our resources to reflect the lifestyle we want and are able to sustainably afford. Write down everything you spent in the last month. This will give you good ideas of how you are spending money and help you identify areas to cut or increase. Separate your findings into wants and needs. Limit your wants and prioritize your needs.
  • Slay your debt_ Acknowledge the total amount of your debt by making a list. Prioritize your debt. Decide which ones are most important. This depends on your particular situation you could slay the largest debt first to give you more confidence that the rest are manageable. Set deadlines for each loan. There should be an estimate of how long it is going to take you to pay off each debt. Think about the triggers that led you into debt in the first place and try to eliminate them. There’s no point getting out of debt only to dive back in.
  • Plan for emergencies Yes, we don’t pray for something bad to happen but you need to strictly define emergencies. A car breaking down or having to pay an unexpected hospital bill qualify as emergencies. So instead of worrying without action, plan for emergencies.

I strongly believe that if we follow this simple principles, we would become good managers of our finances.

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One comment

  1. Tracking of expenses is very vital… A lot of us are not accountable for our expenses as much as we recognise our income… You can start now by accounting for today’s expenditure.

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