money-managementNigeria is currently going through a tough financial crisis and as it is, this affects everyone. I thought it will be nice to share some ideas on how to get what you want by practicing some money management tips.

Understand Needs

You may want the latest techno-gadgets and a yacht. However, your needs are little more than food, clothing and shelter. Good financial management helps you get the goodies when you can afford them. Don’t confuse your lusts with needs.

Live on Less

Live below your income. Your financial reality is the balance in your wallet and your bank accounts.

Additional income source

To with your financial obligations this season, it is important to have more than one stream of income. Think of something else you can do with little investment to generate profit.

Make a Budget

If “budget” is a nasty word in your house, call it a plan. Add up your real monthly gross income. Then add up the deductions for taxes and so on, and subtract the total from the gross to find your net income. List and total all your fixed and variable expenses. If the outgo is more than the income, you have cutting to do. Keep accurate records in your checkbook or computer to stay on track.

Reduce Expenses

Cut spending on large and small items to fund your goals. Carry coffee and lunch from home, so you don’t spend money having to buy at work. Eliminate ego from the equation and find bargains on used merchandise.

Save and Invest

Plan to save every month.

Avoid Debt Troubles

Don’t let debt become a nightmare. Keep non-mortgage debt at less than 20 percent of net income. Including the mortgage, keep it under 40 percent.

Pay Off Debt

Get the monkey permanently off your back. Pay down and pay off debt. List every debt you owe, smallest to largest. Practice strict frugality to free up mega-cash and put extra money on the smallest debt each month, while making minimum payments on the other debts. When that debt is paid off, work on the next largest and so on.

Set and Achieve Goals

Set financial goals for the short and long term. Put them and a plan to meet them in writing. For example, save for a dream vacation, pay off the mortgage, save for retirement and build wealth.

Give and Enjoy

Have fun with your money but don’t hoard. True wealth brings the responsibility to share. Some people even put it first by giving a certain percent to charity.

 

Share This:

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.