We live in a time where finance is not only a subject for business students but a skill each one of us needs. The goal is to avoid the rat race, which can leave you living from hand to mouth. Regardless of how much you earn, if you practice these personal finance tips you could end up making some major changes in your life and becoming more self-aware, which is a step closer to good decision making and better financial habits.
- Have a financial calendar
Just as you schedule your work meetings and other appointments, having a financial calendar can be useful in keeping track of quarterly taxes and things you need to buy or accomplish financially before the year ends. Planning for the future: How to create a Financial Plan
- Keep track of your net worth
If you thought the word net worth is directly linked to people earning six-figure salaries, you thought wrong. Keeping track of your liabilities and assets will help you get a clear picture of your financial standings shedding light on what you need to cut costs on or what you need to invest in.
- Recognize your financial priorities
Set aside a percentage of your income for financial priorities. This includes emergency savings, loans and debts or any other venture you plan to take on once you quit employment.
- Budget for your lifestyle spending
It is okay to live by YOLO but if you’re not Jeff Bezos, Elon Musk or any other financial guru you know about, plan on how much to spend on your lifestyle expenses. This ranges from movies, dates to planning your road trips and travels. Here is How To Live Your Best Life On A Budget
- Have a mantra
You probably have come across quotes and witty words that give you a sense of awakening, leaving you to search for who is behind them. Adopting a mantra will help you have a rule you can fall back on, in times of temptations and when you want to remain steadfast on what you need to spend. This is for thrift shoppers, Ngara, Toi and Gikomba market enthusiasts. “If you can’t see yourself wearing it with more than five outfits and to more than five places, don’t bother.” This is mine. What’s yours?
- Set short term financial goals
The further away a goal seems, the more we tend to give up. After you establish that ultimate goal, have short term goals/objectives, that will get you quicker results as you work to build upon your dream.
- The art of gratitude
Learn to savour what you have now rather than miss out on the present as you try to acquire more. Have you noticed how money is never enough? Before my friends and I had a salary, we used to think of how ahead in life we would be if we earned an income. We saw ourselves accomplishing our goals and even saving for the future. I cannot elaborate further on what happened.
The thing about money is that it prompts status. If you were earning 100,000 Ksh and you suddenly start earning 500,000 Ksh, you will tend to adjust your lifestyle to your new salary. Therefore reward yourself and be grateful for what you can afford this moment and now.
“Gratitude encourages patience—and, thus, a more forward-focused outlook when it comes to your money.” Forbes.
- Be self-aware
After a few months of budgeting and keeping track of your expenditures, you become conscious of the adjustment you might need to make in your finances. This can work in your favour, especially if you are negotiating for your salary in a new company or you just need a raise. Working for less than you spend is a recipe for living beyond your means. This will only lead you to debts and you might not be conscious of the cause, due to lack the lack of knowledge on personal finance and balancing.
Here are 7 common financial mistakes and how to avoid them.
Featured image via hinesburgnurseryschool.com
