TIPS TO HELP YOU TAKE Charge of Your Money
God made man, man made money, and money made man mad may be a simple tongue twister but the message is potent. If you don’t take charge of your money,
God made man, man made money, and money made man mad may be a simple tongue twister but the message is potent. If you don’t take charge of your money, money will take charge of you and that is nothing to write home about. However, taking charge of your money might not be an easy task especially in a world where we are tempted to frivolously spend it. But with the following practical tips, you will be in a better position to take charge of your money.
Determine your net pay: The first step to taking charge of your money is determining how much money gets into your bank account; that is, the amount you take home after all deductions have been made. Your income should guide you on where to live, the kind of house to rent, how much to save and spend in entertainment, among other things. It is advisable not to count on money that you can’t be sure to receive.
Track your expenses: For you to be in control of your finances, you need to understand how you use it. Track how you have been using your money for the last two to three months to give you a clear picture of where your money goes. In addition, it will give you an idea on what percentage goes into what and with this knowledge you will be in a better position to prioritise and minimise wastage.
Create a spending plan: This is basically a budget. You need to come up with a plan on the amount of money to be used on your expenses such as rent, food, clothing, school fees and entertainment, among others and then most importantly stick to it. For instance, it’s not a must you buy new clothes or shoes every month, you can decide to be buying some new clothes after three or even four months depending on the need.
Use cash instead of credit card: Opt to use cash rather than credit card for your purchases for with credit cards, it is very easy to buy on impulse. When you buy in cash, seeing the physical money disappear with every purchase will make you think twice before purchasing something you hadn’t budgeted for. On the same note, while shopping for products, select stores that allow you to negotiate the prices of items. Avoid markets where prices are constant.
Educate yourself: Learn all you can about finances, money management, and how you can best invest your money instead of taking the more common road of instant gratification, overspending and endless debt. Read books or listen to audiobooks, go to seminars, attend classes, talk to your financial-savvy friends, mentors, parents and employers. Get real-world tips and advice from people who are doing well with their money. The more you learn about how to handle your money and the resulting rewards of doing so wisely, the better you will be at managing your finances.
Schedule periodic budget evaluation: It’s difficult to predict how much money you will need in every category of life; a new job may necessitate a wardrobe change and your clothing budget just isn’t going to cut it. That’s why it’s important to have a regular check on how you have created your budget. If it isn’t working, then tweak it. It is your budget after all; just make sure that you keep your long-term financial goals in the picture.
Get an accountability partner: Sometimes it’s hard to go it alone when you are starting something new. If you are married, your spouse will hold you accountable if they agree with you on the plan. If not, find a friend or family member who is willing to help you be accountable to your written budget. Ask your accountability partner to check in with you once a week to see how you are doing at sticking to your budget. Allow them to be a little tough with you if they need to.