Thursday, June 14, 2018

BANKING TIP: Throwing light on personal finance to change your life



Kelvin Mkwawa

Kelvin Mkwawa 

There is never a better time to start your personal finance education. Being financial literacy is the cornerstone to living healthy, happy, and successful life.

You can always improve your financial status so it is never too late to learn few simple finance tips that will add value to your life.

This article is a continuation of last week’s one;

Last week I shared three financial tips that will help you to be financial stable; don’t ever co-sign a loan, make savings a habit, and review your bank account transactions frequently.

This week, I will share five more personal finance tips that will change your life:

Spend within your means

It is well known that most of us spend more than our income which leads to debt and stressful life. We need to start learning how to live within our means; during the last three years of the fifth phase Government of H.E. John Pombe Magufuli, it has shown that most of us are not used to live within our income. We can learn how to spend within our means; this does not mean buying less and cheap stuff rather plan our spending wisely. Learn to spend within your income and you will avoid a lot of money problems.

Don’t borrow money you can’t afford

In an ideal World, everyone would have enough money for his/her needs but that is not the case so some of us will need to borrow money to cater our needs. But unhealthy borrowing can cause you serious problems in such that can affect your finances hence your life. Don’t borrow excessively and if you borrow, make sure it is within your limit and can repay it easily.

Don’t lend money you can’t afford to lose

Here is the rule of thumb on lending money to people; If you can’t afford to lose it, don’t lend it. For example, if someone wants to borrow some money from you and want to use that money in a near future, don’t lend it.

My advice when you decide to lend to someone, is not to expect to get your money back; this will save you the headache of chasing someone to pay you back and prepare you for the worse financially.

Have an emergency fund

We never know what could happen to us and life happens (i.e. loss of a job, car breakdown etc.) to us anytime so we should be prepared. Emergency fund is very important because it can keep you afloat in a time 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 is never late to start building your emergency fund so start saving now!

Seek a financial advisor

Even when you barely have any assets or enough money, it’s always good to seek advice on your finances. A Financial advisor will help you to identify your financial goals and steer you in the right direction on how to get there. Don’t wait until you have a crisis to seek financial advice, do it now.

To conclude, I want to reiterate that you do not have to be wealthy to be in a control of your finances. In today’s world, financial literacy is needed more than ever; whether you are poor or rich, managing your finances is imperative to have a financial stability life.

I know in the beginning it might be hard to plan and live your life per your financial goals, but slowly you will be able to ensure every life choice you make, brings you closer to your financial goals.

If you are still reading this, I want to assume that you have decided to take your financial life more seriously, so start now!

advertisement