How To Manage Your Money To Avoid Being Broke.
You need to learn what to do with your money, how to do it and when to do it. Whether you’re a salary earner, an entrepreneur, or a student, proper money management cannot be overlooked. To ignore the importance of personal finance is to set yourself up to get broke.
Below are five steps that keep you from going broke:
1. CREATE A MONTHLY BUDGET.
You need to plan carefully, how you intend to spend your money. Your budget must be written and easily accessible, either on your computer, phone, or a notepad. If your income is NGN40,000, you should calculate how much will go on necessities like feeding, transportation, housing, etc. Review your list and strike out any irrelevant expenses. Once you are satisfied with a budget that lets you spend below your means, diligently maintain it. You can always utilize Smartteller budgeting tool for easy tracking and planning of your finance.
2. ENSURE THAT YOUR EXPENSES DOESN’T EXCEED YOUR MONTHLY INCOME.
Cut down on costs. It is certainly not financially smart to earn NGN100,000 monthly, and have your expenses per month amass to NGN170,000. You must ensure that what you spend monthly is less than what you earn in the same period. This may be difficult at first and that is why you will have to begin with easy steps. Create a list of the things you spend money on the most, then work on reducing how much you spend on these things.
For example, If you spend a lot of money shopping online, consider disabling your mobile banking.
if you spend too much on internet data subscriptions, then consider turning on your data saver, place background restriction on data hungry apps and turning off your data when you are not using it.
Whatever it takes, spend less than you earn. Far less.
What this means is that you either have to take loans to survive, or you will become a burden, asking those around you for money to fuel your car or anything for survival.
3. SAVE ENOUGH MONEY THAT CAN LAST YOU FOR SIX MONTHS OR MORE.
If you lost your job right now, How long will it take before you declare yourself officially broke? Well you can start saving money that you can use to pay yourself for six months.
This means, if your monthly expenditure is NGN30,000, then you should have at least NGN180,000 saved up. Of course, this cannot happen in a month or two. It takes months of diligently saving up to achieve this. You can set up a payment process that takes out a certain amount from your income and puts aside for savings.
Once you have achieved this saving goal, you are expected to move on to the next target. This is the point where you save, and make your savings work for you. Do not touch your savings from the first goal, it is there as an emergency fund. Transfer it to a reliable FinTech company like Smartteller where you can easily access and monitor, anytime.
While saving is a good way to have a backup plan, you need the money that can reproduce itself. That is where investments come in. Investment is a process that involves putting in money and receiving said money back with added profit after a period of maturation.
After you must have saved for a while, it is best to invest this savings in one of the trusted investment sites in Nigeria. Smartteller provides features that encourage both savings and investments. This way, you can save and invest all in one place!
Once your investment has reached its maturity date, it is wise to take out the profit, then reinvest. Let your money keep working for you
5. BE FINANCIALLY DISCIPLINED.
Without Financial discipline, none of this is achievable. You must make a conscious effort to spend wisely, save and invest. Give yourself to studying personal finance and understand how money works.
Avoid temptations and emergencies that may affect the proper use of your finance.
You are your best motivator to handle your finances well enough to avoid going broke, so put in the effort.
Smartteller is your companion through this financial journey. Visit www.smartteller.net/education to learn more about finance or download our app to access financial tips, to start saving and investing today!