Being broke can be very depressing. Do you know the reason your finances are in a mess is because you probably haven’t employed prudent management principles to your finances? To gain total financial freedom, managing your finances should be your topmost priority. Your finances cannot be left to chance, and you should not be borrowing to cover your expenses every month. You can avoid that by making prudent financial decisions and learning to manage your finances properly.
Below are five (5) ways to better manage your finances;
1. Make a budget and stick to it – having a budget is very important in managing your finances, you must record every income you receive from all sources and make a list of all your expenses every month and make sure you stick to it. When you stick to your budget there will be no need to borrow to cover for expenses.
2. Make savings a lifestyle – you don’t have to spend everything you earn, every month, make sure you save at least 10% of your income. You should learn to save before you spend. You can do this by placing a standing order on your account. That way, immediately you receive any income, the deduction takes place before you even access the funds. Savings is vital because it helps us avoid debts.
3. Build an emergency fund – these are funds set aside for rainy days or unforeseen circumstances such as a job loss, illness, death, major repairs to a home or car etc. Having an emergency fund will cushion you during these times.
4. Pay off debts – in your monthly budget, make provisions to pay off debts. This way you can reduce your debts gradually on a monthly basis. Pay off debts with higher interest rates first. And yes, you’ll have a goodnight sleep if you don’t owe.
5. Seek Investment advice – if you have little or no knowledge in finance or investments, seek advice from an expert to reduce your risk of losing your investment (s) entirely.
It’s not too late to manage your finances. Start today!