Financial stability is not a state that occurs coincidentally. It is something that warrants intentional and careful planning. I’m sure you’ve heard of that saying “Money talks”…..well I want to tell you, IT DOESN’T. As a matter of fact, it goes mute when you are spending, grows legs and sometimes wings and fly away. You have to chase your money to know where it is going and if you find out it goes to the wrong places, it is your responsibility to pull it back.
To be financially stable, you have to cultivate certain spending, saving and record keeping habits. These habits have to be a conscious effort on your part and if you are married, from both sides, or else one person’s bad habit will drown the other’s effort.
The topic “financial stability” is so broad, it cannot be exhausted in this blog post but I want to share with you what my husband and I are currently practicing and we have seen results over and over again.
#1. Set a financial goal- I see goals in general as dreams that have timelines. When accomplished, there is a sense of fulfillment and success that comes with it. Financial goals are not any different. I can also compare financial goals to a project that needs to be completed. You have a strategic plan and phases on how it will be completed, what you are aiming to do and how it will be accomplished.
- Key take home- Set a financial goal and work towards it- You will be proud of yourself when accomplished.
#2. Have a budget- Draw up a monthly/weekly budget. You have to be able to account for every penny that comes in and goes out. Which brings me to my next point….
#3. Know where your money goes- Once upon a time I used to have a vague idea of where my money went and what I was spending my money on. Not anymore. Now I dictate where it goes even before it arrives. Learn to control your money. If you don’t know where it goes, you can take a 2 month retrospective study of your account and spending. This will enable you know your spending pattern. You need to track your spending. Then, do a chasing. Meaning, chase it and pull it back if being spent on unnecessary things. This is where you have to eliminate the unnecessary . Read here for tips on how to save money
- Key take home- Track your spending and do not spend more than you earn.
#4. Make savings your #1 priority. This should not be debated. No matter what you earn, you have to save. I am not a financial analyst or expert but I know that saving a sizeable portion of your net pay (into savings account, retirement plan etc.) is advised. When you plan your budget, you need to allot some money for savings.
- Key take home- Save! Save! Save!
#5. Reduce the use of credit card- This is very common with folks in the western world. Some of us use credit cards for almost anything and everything. From buying ordinary bottled water, to buying gums at the cashier stand at Walgreens pharmacy….. You name it! I call it the abuse of credit card usage. Cultivate the habit of using cash. For debit cards, I will suggest that you withdraw your weekly cash need, place it in an envelope and draw from this when you need to spend. This will give you a visual awareness of how your account is being depleted of funds.
- Key take home- Reduce the rate at which you swipe your debit or credit card.
Rick Warren says “Ignorance of your financial condition plus easy credit equals disaster”
#6. Automate the payment of bills- If it is available for your monthly payment, set up an automatic deduction from your account. Besides the fact that this reduces the burden of having to remember to pay a particular bill every month which in turn takes care of possible late payments, it also reduces the false belief that there is a lot of money in your account.
#7. Educate yourself on money management- There are quite a number of resources online on how to manage your money. Enrich yourself and practice it. You will be amazed how your money will dance to your tune once you master the art.
So I have shared mine. What about you? Let me know how your money works for you.
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Tolusworld Profile- Tolu Dairo MD. MSc. A motivational speaker and writer who uses her passion for career/self-development, positive parenting and healthy relationships to inspire women to live their dreams.
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