Published On: Sat, Nov 21st, 2015

Personal Finance: What you need to know about managing your money

The term Personal finance is defined as the undertakings involving personal or household monetary planning and/or execution. Personal finance involves everything regarding budgeting, saving and investing your money.

From the word personal, ‘personal finance’ depends solely on individual earnings, needs and goals. It is pertinent for individuals to bear the responsibility of proper financial management. Personal finance is not as easy as many would be tempted to think. Managing money can be really taxing, especially if you lack the discipline.

The underlying aspect in personal financial management is the analyses of your immediate financial disposition, calculation of your short term and long term expectations and implementing a full proof roadmap on how to fulfill those expectations. This should be done bearing in mind individual financial limitations.

A great majority of people struggle with finances. Some spend too much, while others have no idea of  the value of investing their money. To avoid been categorized as a failure, you need to be smart. Know how to budget, handle debt (if any), and develop concrete financial strategies.

Proper personal finance management will trickle down to your business in that, you will be able to handle the businesses finances. This will encourage investor confidence in the case of an expansion plan.

Attributes of good personal finance management

  • Attend financial seminars and read (extensively) relevant literature in order to learn from the experts. By so doing, you can find different ways to invest and save your money.
  • Surround yourself with people who are sound spenders. Birds of a feather….
  • Decisiveness in dealing with financial dilemmas
  • An inclination for self-motivation. You need to believe in yourself in order for you to have the confidence to manage your financial circumstances.
  • Personal integrity is key in making sound personal financial decisions.
  • Attention to detail . Anything that affects your financial position is worth your attention. Trust me, you cannot afford to ignore your money problems

Are you looking for ways to wisely manage your money? Follow these tips

  • Make a budget – this should be your ultimate goal. A personal budget ensures that you spend wisely and save more. Always spend within your budget. Make a reasonable budget; not over estimating or under estimating any expected expenses.
  • Avoid impulse buying – in today’s world of innovation, manufacturers are finding new ways to appeal to the needs of potential buyers. They advertise a want making it a need in order for them to rake in the profits. So, before buying anything, it is important to have a score card examining the urgency and the need versus the want.
  • Have a retirement savings plan – you can either subscribe to an existing retirement scheme or you could take matters into your own hands and open an account tailored to saving your retirement money.
  • Resist maxing out on your credit card – be very careful not to over indulge when using your credit card because you could land yourself in a debt riddled hole that you may have a hard time getting out of.
  • Accurate record keeping. Always keep track of your money; from your earnings, to your expenditure and your savings. Keep receipts of your transactions to track your expenditure and remember to cut down on unnecessary spending.
  • Save money for your kids’ education – from the moment you plan to have children, start a saving scheme for their future education. This eradicates the need to come up with lump sum amounts that might not be available later in the child’s life.
  • Have a financial calendar – this will enable you know when and what bills are due (water, taxes electricity e.t.c)
  • When in business, always think of investing a portion of the profits back into the business in order to expand and build a solid brand. Proper financial management will enable you to build your business brand. A strong brand makes it easy for you to sell. One way of building a strong brand is by the use of custom boxes that help your products stand out.
  • Invest your money wisely – make sure you conduct proper research into investment opportunities before deciding to invest.
  • Minimize financial risks – do not take any unnecessary risks that might be detrimental to your financial wellbeing. You will do well not to gamble with your money. Keep financially sound company. This will decrease gullibility since your friends will not try to sway you into uncalled for risks.

If you have proven yourself to be incapable of managing your own finances due to one reason or the other, you could always acquire the services of a Personal finance manager. However, be keen enough not to hire a quack, who will take advantage of you and run away with your money. Take them through a thorough vetting process to ensure that they are competent and knowledgeable.

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