Personal finance tips that will change your life: part two

This article is a follow-up to last week’s article; Last week I have shared three financial tips to help you be financially stable; never sign a loan, make savings a habit and review your bank account transactions often. This week I’m sharing five more personal finance tips that will change your life:

Spend within your means — It is well known that most of us spend more than we earn, leading to debt and a stressful life. We must begin to learn how to live within our means; most of us are not used to living within our means. We can learn to spend within our means; this does not mean buying less and cheap goods, but planning your spending wisely. Learn to spend within your means and you will avoid many money problems.

Don’t borrow money you can’t afford — In an ideal world, everyone would have enough money for their needs, but this is not the case, so some of us will need to borrow money to meet our needs. But unhealthy borrowing can lead to serious problems that can affect your finances and therefore your life. Don’t borrow excessively and if you do, make sure it’s within your limit and can be easily repaid.

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Don’t lend money you can’t afford to lose — This is the rule for lending money to people; If you can’t afford to lose it, don’t lend it. For example, if someone wants to borrow money from you and you want to use it in the near future, don’t lend it. My advice when you decide to lend to someone is don’t expect to get your money back; it will save you the headache of chasing after someone to pay you back and prepare you for the worst financial situation.

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Have an emergency fund — We never know what can happen to us, and life (ie job loss, car breakdown, etc.) happens to us at any time, so we must be prepared. An emergency fund is very important because it can keep you afloat in times of need without relying on expensive short-term loans. So how much should you save for your emergency fund? A good rule of thumb is to have an emergency fund to cover six (6) months of your living expenses. It’s never too late to start building your emergency fund, so start saving now!

Find a financial advisor — Even if you have almost no funds or enough money, it’s always good to ask for advice about your finances. A financial advisor will help you identify your financial goals and guide you in the right direction to achieve them. Don’t wait until a crisis hits to seek financial advice, do it now.

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In closing, I want to reiterate that you don’t have to be rich to be in control of your finances. In today’s world, financial literacy is needed more than ever; whether you are poor or rich, managing your finances is imperative to living a financially stable life. I know it might be difficult at first to plan and live your life around your financial goals, but slowly you will be able to ensure that every choice in your life moves you closer to your financial goals. If you’re still reading this, I’m going to assume you’ve decided to get more serious about your financial life, so get started now!

Kelvin Mkwava, MBA is an experienced banker. He can be contacted via email: [email protected]

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