Money is very important in that it helps us to purchase the goods we need and stay afloat. Considering this importance, it is necessary to know how to manage money. That is because the failure to manage money well may often lead to wastage and extreme losses thereafter.
10 WISE STEPS TO MANAGE PERSONAL FINANCE
We draft and dedicate this article to ten of the wise steps you may take to manage your personal finances:
1. ASCERTAIN YOUR NET WORTH
You can never spend more than you earn. Before you even start budgeting about your expenses, you must first and foremost know how much you have. Thus, you need to take stock of your inventory and the income streams and sum their totals. lt is only then that you will have an accurate picture of just how much you may spend.
2.TAKE STOCK OF YOUR LIFESTYLE
The lifestyle you embrace can also make or break the situation. If yours is an extravagant lifestyle, you may have to make appropriate adjustments. That may mean you cutting back on luxuries, unnecessary travels, alcohol, and other expenses which are really not what may be considered necessary or vital.
3.DRAW A LINE BETWEEN YOUR NEEDS AND WANTS
Needs are items that are essential and mandatory for human survival. They include things like food, Clothes, shelter and medicines. Wants on the other hand are items that bring along added comfort but are not really essential for human survival. You have to draw a clear line between these two.
4.START SAVING EARLY
It is never too early to start saving. In fact, we recommend that you start saving as early as can be practically possible. By starting early, you place yourself in a position in which you may now gain higher returns than you would normally. Then again, you develop a sense of patience and frugality.
5.PLAN WAY AHEAD FOR YOUR MONEY
Just like starting to save early, it is also important that you plan for your money way in advance. As you do so, try and partition your expenses appropriately. Some examples of these are savings, retirement, consumption and education among others. This will see to it that you spend your money wisely.
6.GET OUT OF DEBT AS SOON AS POSSIBLE
Debt is never a good thing to contract even though circumstances do arise that push us into it. ln the event that you find yourself indebted, you have to make every effort to repay the debt as soon as possible. Debt accumulates interest that increases with time. Add this to the penalties that come along with non-payment or defaults and you simply spoil the mix.
7. GET TO KNOW YOUR CREDIT SCORE
A credit score indicates the level of risk you pose to a potential lender. It is a three-digit number that nonetheless can really impact your financial life considerably. This is especially when applying for a mortgage or taking up car loans. Take the necessary actions to improve your scores if you see them in the red.
8. PUT IN PLACE AN EMERGENCY FUND
Emergencies do arise from time to time which takes us completely off-guard. As part and parcel of preparing for the same, we urge you to put in place an emergency fund. This is simply a special account that you only draw from when you are in danger of having a strange circumstance to tackle.
9. CONTRIBUTE TOWARDS YOUR RETIREMENT
Just like starting to save early is crucial, so it is with contributing to your retirement. Many people never see beyond their workdays and have a false sense that they shall keep working forever. Nothing could ever be further from the truth. Instead, you may even lose your job prematurely. Never wait for that to happen, start early.
10 FIND A SUITABLE COMPANION
You cannot walk in this journey of prudent financial management alone. This journey is ordinarily quite treacherous, rough, and bumpy. You need a caring, listening, and compassionate partner. The partner may come in the form of a financial Institution, life coach, finance expert, or even a trusted relative.
Talking of a suitable companion, we ask you to look no further than we, Fundo. We are a personal loan provider for Australian residents. Among the services we provide are short-term loans, no-check loans, same-day loans, and easy cash loans. We also help our clients to manage their money well! Get to us via our website https://fundo.com.au to start out.
The opinions expressed in the Blog are for general informational and entertainment purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific investment product. It is only intended to provide education about the financial industry. The views reflected in the commentary are subject to change at any time without notice.
