Let us first of all identify our money personality. We all use money differently. Sometimes you will be a spender, other times you will be a saver.
Each and everyone of us have a dominant money personality driven by specific needs, your current stage in life, and other external factors like peer pressure and your background. Others include the way you spend and save your money. It is important to understand how the way you manage money affects your financial future.
If you are a spender you will most likely like to treat yourself, enjoy shopping, you always experience shoppers’ remorse – (regret your purchase when the good feeling passes), you often feel addicted to buying things, you are often impulsive when spending, you would rather feel good now and save later.
If you are a saver; this means that having money provides some kind of security for you, you feel financially safe and you always have money saved for the rainy day, you love bargains; you look out for discount sales and promotions when you want to buy things.
If you must achieve your financial goals and live a wealthy life. These are some of the rules you need to follow.
- Take responsibility for your finances.
Taking responsibility for your finances and committing to taking a good look at where you stand involves you being honest with yourself and your financial situation.
If you have credit cards and the loan interest is piling up month after month. Know that denial is not going to make that debt disappear. If the thought of seriously examining your present financial situation leaves you feeling overwhelmed, try and call a friend who is good with finances and who you trust, to help you sort things out.
- Live every day within a budget.
Don’t say I don’t know how to budget. Budgeting is a very simple task that you need to achieve a successful wealth creation journey. Budgeting gives you control over your money. A budget helps create financial stability. By tracking expenses and following a plan, a budget makes it easier to pay bills on time, build an emergency fund, and save for major expenses such as a car or home. Overall, budgeting will put you on a stronger financial footing for both your day-to-day spending and the long term goal.
Budgeting helps you to keep your eye on your short and long term goals, it helps to ensure you don’t spend money you don’t have, it leads to a happier retirement, it helps you prepare for any emergencies and it also helps shed light on bad spending habits.
- STOP spending more than your income. (earnings, money gifts, investments etc)
Truly speaking, if you adhere to strict budgeting you will never spend more money than you earn. STOP relying on your own willpower to restrict your spending.
STOP focusing more on immediate satisfaction versus long-term benefit, and
STOP following the crowd.
Unfortunately, many women do not follow the rule of spending less than they earn and, are therefore, unable to move on.
No matter how small your income is, this is a crucial rule to wealth creation. So my answer to many people who say to me…what I earn do not even take me home, so how do I spend less than I earn? If what you earn does not meet this rule of spending less than what you earn, then you must seek to earn more; create other streams of income.
Create opportunities where you can earn more. You can earn from your monthly income, you can earn dividends from investment and you can earn from other side hustles. This way you are able to meet your exigencies and still able to spend less and invest.
- Dont marry somone whose financial value is different from your own.
Ask yourself these questions; Does he/she live his/her life on loans while you, cannot even stand the thought of debt? Does he/she plan towards a purchase while you happen to be the spur-of-the-moment spender? Is he/she a risk-taking investor but you can’t think beyond savings deposits? You need to reconcile these differences while you are still dating or about to date or be ready for financial clashes later on.
- Put some money away for a rainy day
The phrase save “money for a rainy day” is an idiomatic expression that means to reserve money for a time when it might be needed unexpectedly. Someone said to me, every day is a rainy day in Nigeria; so my answer is the reason why you should put more money away.
Savings cannot be overemphasized. Save money and save your life. Having a supply of cash to draw from without racking up debt will position you to tackle unexpected expenses with a sense of calm and control. Start now with what you have no matter how small. Make it a habit and be consistent. Ensure that you put some money away every day, every week, every month depending on how well you can discipline yourself.
- Invest
We have learned a lot about investing in this column. We have discussed how to draw a financial plan, one of the best ways is to start when you are not ready.
Two things should however stand out for anyone that is new here. Identify your risk tolerance and your investment time horizon. This is an extremely important determinant of the amount of investment risk you can handle and is generally dependent on your age and investment objectives. Once you have done this, then find suitable investments that you can build your wealth with. Rely on financial institutions for now. Dont fall victim of get rich quick schemes. Anything that will last, takes time.
- Give a percentage of your earnings to charity.
Do this after you have been able to support your family. Some people enjoy the publicity of charity while their own family is in need. God created the family unit so that everyone can get required support as much as possible.
Never neglect your family at the expense of charity or your life.
Feel free to share with me, which of these rules do you follow on a consistent basis and any other rules you know.
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