Quote of the Week: “The best thing money can buy is financial freedom,” Rob Berger.
Here is the truth about money, it will never be enough. Every coin you get you will want to double or triple, which is fine and this is what you should be doing. Very often though, we often feel like we do not have enough money, which is not always true. Rather than focus on what seems to be lacking, focus on managing whatever you have with the aim of growing it.
Personal finance management is a skill anybody can learn. It is not complicated but consists of a few basic fundamentals anybody can and should master. Let us look at them:-
1. Set Clear Priorities and Goals
Having clear priorities in life is not only good for your career and relationships but for your finances as well. It is difficult to get to a destination you are unaware of. If you have no specific goals then you could settle for mediocrity without realising and thus fail to achieve your full potential. Having goals will help you align your financial strategy towards achieving them.
2. A Comprehensive Budget
If you are a regular follower of this blog you might haverealisedthat budgeting is a common theme that pops up regularly.
We cannot overemphasize the importance of a budget because it is the foundation of personal finance. Align your budget to your priorities and goals. This will add fuel to your dreams.
3. Save then Invest
Savings and investments are foundations for personal finance. We all need a Savings Plan. Savings will help you build emergency funds while generating passive income. Never let your money lose value as a result of inflation. Savings are not enough on their own though. You need to invest and diversify your investments. You can also use your savings as the capital for investments.
4. Control Debt
Debt is the personal finance bogeyman. You should fear it as it can complicate your entire life. Debt, if left uncontrolled, can lead you to a vicious cycle of poverty. Controlling debt begins with limiting ones appetite for borrowing by striving to live within your own means. Next, focus on repayment of your debt as soon as you can.
5. Retirement Planning
This is one area many people ignore as they think of time as an unlimited resource. The truth is that time is irreplaceable. If you have the time now, make better use of it. When it comes to saving for retirement, starting with a small amount earlier will yield more than starting with a higher amount later.
Conclusion: These five tips form the foundation of personal finance. Once you master them and work hard, you will be able to achieve your goals.