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Hello lovely readers! Its a rainy Tuesday here but this has only added to the beauty of the day!
Today on Temmy Balogun’s Blog we are delving into tips of financial planning and management. I dont know about you, but for me and many that have come across, money is easier spent than gotten and many individuals tend to have budgets that are way above their income. You get a certain income,and in few minutes you can tell where you spending it all, thats because before it comes, you already have it written down,and you find it so hard to add savings or investment to the list .
Most experience this ,first three to five years after getting their first job, after a while maturity sets in and we see reasons while we should save but at the same time we start getting expose to more responsibilities . For those who deem it fit to save, it happens that the security attached to their savings is so weak that, if any financial challenge comes up they run quickly to it. If you have ever experienced this or still experiencing it ,this article will help with tips on ways to be a good financial planner and manager of your personal income and then with frequent pratice, you find yourself to have turned out very good at managing finances no matter how little.
Take a break from what you doing and read these excerpt from Investopedia on the most important things you need to understand about money if you want to live a comfortable and prosperous life.
Learn Self Control
The first on the list is building of self discipline, this comes from within and it takes determination not to or to do a particular thing no matter how hard it seems. If you’re lucky, your parents taught you this skill when you were a kid, you should thank them alot. If not, keep in mind that the sooner you learn the fine art of delaying gratification, the sooner you’ll find it easy to keep your finances in order. Although you can effortlessly purchase an item on credit the minute you want it, it’s better to wait until you’ve actually saved up the money. Do you really want to pay interest on a pair of jeans or an iphone ?
Take Control of Your Own Financial Future
If you don’t learn to manage your own money, other people will find ways to (mis)manage it for you. Some of these people may be ill-intentioned, like unscrupulous commission-based financial planners. Others may be well-meaning, but may not know what they’re doing, like Grandma Betty who really wants you to buy a house even though you can only afford a treacherous adjustable-rate mortgage.
Instead of relying on others for advice, take charge and read a few basic books on personal finance. Once you’re armed with personal finance knowledge, don’t let anyone catch you off guard – whether it’s a significant other that slowly siphons your bank account or friends who want you to go out and blow tons of money with them every weekend. Understanding how money works is the first step toward making your money work for you.
Know Where Your Money Goes
Once you’ve gone through a few personal finance books, you’ll realize how important it is to make sure your expenses aren’t exceeding your income. The best way to do this is by budgeting. Once you see how your morning java adds up over the course of a month, you’ll realize that making small, manageable changes in your everyday expenses can have just as big of an impact on your financial situation as getting a raise. In addition, keeping your recurring monthly expenses as low as possible will also save you big bucks over time. If you don’t waste your money on a posh apartment now, you might be able to afford a nice condo or a house before you know it.
Start an Emergency Fund
One of personal finance’s oft-repeated mantras is “pay yourself first”. No matter how much you owe in student loans or credit card debt and no matter how low your salary may seem, it’s wise to find some amount – any amount – of money in your budget to save in an emergency fund every month.
Having money in savings to use for emergencies can really keep you out of trouble financially and help you sleep better at night. Also, if you get into the habit of saving money and treating it as a non-negotiable monthly “expense”, pretty soon you’ll have more than just emergency money saved up: you’ll have retirement money, vacation money and even money for a home down payment.
Don’t just sock away this money under your mattress; put it in a high-interest online savings account, a certificate of deposit or a money market account. Otherwise, inflation will erode the value of your savings.
Start Saving for Retirement Now
Just as you headed off to kindergarten with your parents’ hope to prepare you for success in a world that seemed eons away, you need to prepare for your retirement well in advance. Because of the way compound interest works, the sooner you start saving, the less principal you’ll have to invest to end up with the amount you need to retire, and the sooner you’ll be able to call working an “option” rather than a “necessity”.
Company-sponsored retirement plans are great but you still have to set up your own retirement plan, it could be through savings in financial institutions, buying shares ,bonds among others,but make sure they are all for futures purposes.
Get a Grip on Taxes
It’s important to understand how income taxes work even before you get your first paycheck. When a company offers you a starting salary, you need to know how to calculate whether that salary will give you enough money after taxes to meet your financial goals and obligations. Fortunately, there are plenty of online calculators that have taken the dirty work out of determining your own payroll taxes, such as Paycheck City. These calculators will show you your gross pay, how much goes to taxes and how much you’ll be left with, which is also known as net, or take-home pay.
Also, you’ll be better off in the long run if you learn to prepare your annual tax return yourself, as there is plenty of bad tax advice and misinformation floating around out there.
Guard Your Health
Some companies take care of their employees health insurance, if yours dont and meeting monthly health insurance premiums seems impossible, what will you do if you have to go to the emergency room, where a single visit for a minor injury like a broken bone can cost alot? If you’re uninsured, don’t wait another day to apply for health insurance; it’s easier than you think to wind up in a car accident or trip down the stairs. You can save money by getting quotes from different insurance providers to find the lowest rates. Also, by taking daily steps now to keep yourself healthy, like eating fruits and vegetables, maintaining a healthy weight, exercising, not smoking, not consuming alcohol in excess, and even driving defensively, you’ll thank yourself down the road when you aren’t paying exorbitant medical bills.
Guard Your Wealth
If you want to make sure that all of your hard-earned money doesn’t vanish, you’ll need to take steps to protect it. If you rent, get renter’s insurance to protect the contents of your place from events like burglary or fire. Disability insurance protects your greatest asset – the ability to earn an income – by providing you with a steady income if you ever become unable to work for an extended period of time due to illness or injury.
If you want help managing your money, find a fee-only financial planner to provide unbiased advice that’s in your best interest, rather than a commission-based financial advisor, who earns money when you sign up with the investments his or her company backs. You’ll also want to protect your money from taxes, which is easy to do with a retirement account, and inflation, which you can do by making sure that all of your money is earning interest through vehicles like high-interest savings accounts, money market funds, CDs, stocks, bonds and mutual funds.
The building block of being an effective income manager, is to have self control, and this can be achieved through lots of pratice. It might be hard to do but when you remember doing saves you from lots of issues and unnecessary expenses, you would have no option than to train yourself that way and also your partners and kids. Many who have studied financial management has a course, still have issues managing their finances well, because they lack self control, its not about reading this, its about praticing it and making it become part of you.
