Finance

5 Steps To Effectively Manage Your Personal Finance

Managing your personal finance can be one of the easiest things if you are going about it the right way, seeing as it basically involves how you manage, spend and save your money. If you are going about it the wrong way, however, it poses as a challenge too hard to control.
Notice I used the word “Poses”? Well that’s because whatever the situation is with your finance, if it’s good, bad, great or not so great, it is your actions or inactions that shaped it to its current state.

 

So, if you’ve been doing well with managing your personal finance kudos to you and if you are doing not so good with it, I’ve got good news for you because you can still turn it around. We have compiled five steps in this article which we employ to help for our numerous clients manage their personal finance better:

Managing your personal finance by setting financial goals

Set your Financial Goal(s)

This is the very first step and it is very crucial because to make smart decisions with your finances you need to know what you wish to do or achieve in life and set a timeframe. Write down your financial goals, list them in the order with which you want to achieve them and determine your long term and short term goals.

You can work towards your long term goals while also working on your short term goals.

 

Create a Financial Plan

A financial plan is very important to enable you reach your financial goals. With a plan you can decide the steps to take towards achieving your goals, how to save and how much to spend.

 

Budget Your Spending

Account for every of your expense and spend wisely, try not to spend the rest of your funds on expenses that are not important. If you will need to spend outside your budget, it should be for family emergencies or business opportunities.

 

Consider a Side Hustle

A side hustle can be a small business venture or extra work which can be part time or a remote job. No matter how little you earn from a side hustle, the money you make from it can be very helpful when you want to sort out bills or pay for little things that eat through your earnings like transport fare or fueling your vehicle.

 

Save and Invest

It is very essential to save if you plan on managing your personal finance better, not only does it help you achieve your financial goal but it also helps you prepare for unexpected emergencies that might raise up their ugly heads. Mothers are great at saving and managing money, you can learn a thing or two from them. Financial experts suggest you save up at least 10% of your monthly earnings, that is the ideal amount, but if you can save up more than that quota, even better.

Also, most times saving doesn’t just cut it, you should also consider investing, you get to earn more money on your idle funds(savings). There are various investment opportunities you can consider.

 

How do you manage your personal finances? Share with us on the comment box.

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