Let’s Talk About Personal Finance

Personal finance involves making complex and multiple individual finance decisions which ultimately defines the quality of life lived. If not done properly it may make one,

• Sink into debt.
• Have no Savings for future.
• Have no discernable investments.
• Stressed among other medical conditions.
• The personal financial process consists of five separate but interrelated steps. Which include;
• Determining the current financial position.
• Determine your financial GOAL.
• Developing a financial plan.
• Implementing the plan.
• Monitoring the implementation.
• To determine one current financial situation, consider facts such as,
• How much income do you have?
• How much expenses do you have?
• How are the expenses allocated?
• How much loan and other liabilities do you have?

It is recommended that you keep track of your expenses on a daily basis .ie log your daily spending into a book. This will help you understand your spending habits and your net worth.

Principles in Saving and in Spending

It is very important to be principled when it comes to saving and spending. Consider the following,

• Have a personal budget. That details your income and expenditure.

• Understand your money personality.

• Have a shopping list to avoid over spending and impulse buying.

• Save at least 10% of your income on a monthly basis.

• Save from the source e.g. check off, Direct debits etc.

• Don’t spend more than 30% of your income on rent or paying for mortgage.

• Don’t buy a car that is more than 8 times your monthly income.

• Don’t carry more cash than is necessary.

• Buy goods in bulk.

• Buy goods/services during sales campaigns.

• Save in areas which pay compound interest not simple interest.

• Ensure that the rate on investment is higher than inflation.

• Reduce your taxable income by taking advantage of government policies.

• Borrow to purchase assets that increase in value over time.

We hope that this will make a difference, all the best!