Being good with money is beyond sustaining your day to day expenses. A good portion of people do not manage their money properly. However, there is hope for you if you find yourself in this group of people. Having a good personal financial plan can be the light at the end of the tunnel if you are trying to properly manage your personal finances.
It may take some time to understand how money works to improve upon habits and make the necessary commitments to get your financial life in order.
This article shares some valuable tips from our periodic Barter Webinar where Tosin Olaseinde, Founder of Money Africa and Ndala Kakingaon, Chief Financial Officer of Ecobank Zambia talk about “Managing personal finances in 2021”.
Personal finance is 80% mindset and 20% knowledge.
To understand personal finance, you must first analyze what money means to you and your relationship with it. Once you have the right mindset about money, you are tilted to the right path of a successful personal finance journey. It might be tough to get into that mindset in the first place; however, you will slowly convince yourself how important it is to manage your finances properly through commitment and discipline.
Have a financial goal
A financial goal will give you direction on how to manage your expenses. This will clearly enlighten you with the opportunity cost of overspending. Financial planning will also help you create a budget plan to enable you to achieve your set goals.
Study your bank statements
A bank statement is a document that shows information about your account activity and balances. Using this information, you can balance your accounts and most importantly review spending. Knowing what you spend most of your income on is the first step in identifying which expense to cut short. Studying your bank statement will also help you understand the power of budgeting. You can also study your Barter app transactions to monitor your expenses and see what consumes your income the most.
Consistency is key
Consistency should be the foundation of your personal finance journey. Spontaneity does not help in financial management. Therefore, you must have a healthy and consistent savings and investment habit to usher you reach your financial goals. As your savings and investments increase overtime and become evidently more than it was before, you will be motivated to increase the amount you save.
Build a budget
Budgeting will help you create a spending plan for your money, ensuring you have enough money for your needs. This will also keep you out of debt or get you out of debt if you are already in one. With proper budgeting, your limited monetary resource will be managed efficiently.