Finances are like living organisms. It is almost impossible to find them where you left them yesterday. They will either go and pay debts, or come back with returns if you invest. And if you don’t plan for them, they will leave your pocket without notice.
So how do you manage the movement of your personal finances successfully? There is no straight forward answer but there are some guiding principles. Traditionally these principles are five:-
- Assess your finances
Make a deliberate income statements, which records all personal income and expenditure. Depending on your source of income, this could be on a weekly or monthly basis.
- Set your goals
Setting your goals assist you to make systematic progress in addressing your short term, medium and long-term needs. While it is never too late to set goals, there is more possibility for success and happiness if you plan your goals as early as in your 20’s even before regular income. The short term goals might be a fringe, cloths, shoes and other basics, medium term goals might be a plot, a house or mortgage or even a car.
- Create a Plan
A plan is then necessary as a road map to meeting your goals. You could either consider moving to a cheaper flat, or move to your working area
Prioritize and sequence your goals, based on discussions with your spouse (if you’re married). Accomplishing these priorities requires some consistent discipline of expending and commitment even to timeliness usually, failing to meet targets from other goals.
- Monitor and re-assess
All the above steps are not cast on stone, you make a deliberate review of the goals and targets, as well as the adjustments you could equally adjust your timelines, or change the sequence of your goals.
The golden word in personal financial managements however, is discipline. In sociological theories, practicing the above principles will slowly become a lifestyle and before long you will be a specialist in household economics. CLICK TO GET STARTED WITH SBC TOWARDS FINANCIAL FREEDOM
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