Quote of the Week:"Budgeting has only one rule: Do not go over budget."~ Leslie Tayne
Majority of us want to master the art of making money, keeping it and multiplying it over time. It is a skill that will help us live a comfortable life. What do you need to master this skill? Here are 5 things that should set up your foundation for better money management.
What matters the most to you? Your values should guide your financial planning. You should be aware of your values and align your entire financial strategy with them. Put your money where your values are. Identifying your values might also help you identify areas where you are wasting your money. Having a financial strategy that represents your values will not only improve your financial wellness but also your overall wellbeing.
Once you have highlighted your values it is time to set financial goals. These goals should represent your vision. Where do you want to be in the future? Whether they are short-term spending goals or long-term saving goals, setting goals will help build your focus and budget better.
Your budget should be guided by your values and goals. You can have a monthly, weekly or even a daily budget, it all depends on how regularly you get an income.
When budgeting, always ensure your expenditure is less than your income. When expenses exceed income this will set in motion a chain of events that will leave you in debt. Never spend, or plan to spend, what you don’t have.
4. Pay Yourself
It is always advisable to “pay yourself first”. How do you do that? By giving yourself a treat (that does not negatively affect your financial wellness) and/or saving towards something that will help you achieve one of your goals. You can save for a house, car, holiday, education, or whatever makes you happy. Saving for retirement is also a way of paying yourself…in the future. You will not always have a job and even if you start a business, you will not have the energy you have today indefinitely. Who wouldn’t like to retire early anyway? Start planning for it today.
This is where most of us fail. We often have great values, well thought out goals and a balanced budget, but we do not monitor our progress. This is why most New Year resolutions always fail. This is why most of our financial plans don’t work. You have to track your progress and you have to remain disciplined especially when it comes to following your budget.
Most of us are not very likely to win a mega jackpot or a lottery during our lifetime. However, this does not mean that we will never be rich and happy. Following these tips can set you up to a life of comfort and financial wellbeing, if you are bold enough to stick to your plan.