Personal, according to the Advanced English Dictionary, means something that affects or concerns a particular person in their private life and personality. Since the topic of this blog involves the word personal and finance it thus means that when it comes to the management of personal finance, you get the last word. What you do with your money is your business, and thus out of the privy of the general public since personal finance is, well, personal.
But since the moment humans learned to communicate through language, advice has been more or less bundled into that communication. Thus, although personal finance is, well, personal, I could tell you a thing or two that I feel you could adopt to ensure that you manage your finances to provide maximum utility.
Skills You Need talks of personal finance as involving being aware of your position financially and then undertaking steps to ensure that you have meaningful outcomes that you can be proud of in the end.
Some things that you could do to manage your finances better might include:
Be aware of the limits of your income
Money is a resource. And like all resources used in satiating limitless and sometimes needless human wants, it is scarce, for scarcity is what confers value and thus utility. However, this last one is highly subjective. Thus, this scarcity dictates that money should be managed prudently and effectively to provide the highest utility values.
Since they pay you in currency, which is money, it means that what they pay you is probably not enough to cover all the exposed parts of your financial anatomy. This, therefore, means that you must know how far you can stretch your income before it snaps and hit you right between the eyes in the form of debt. To avoid the embarrassment of debt, you must be able to prudently manage your money, ensuring that you exercise financial brevity for brevity is the soul of wit. Using your money correctly will make the world see you as a smart person indeed.
Save whenever and wherever
A lot of literature, both online and offline extolls the virtues of saving. Saving refers to the act (you must do it, not just think about it) of setting aside some portion of your income to cover unprecedented outcomes, mostly negative, in the future or to accomplish a given task in the future. On the battle of whether you should save before or after, I do not know enough to actually form an opinion. Do as you see fit.
Now, saving has been difficult even in the best of times, and now with the advent of Covid-19, the level of difficulty is far above the reach of most ordinary folks. This smacks true for us in Kenya, where inflation is in a hurry to reach its teens while wages, not in a hurry to catch up, are sticky flowing with the grace of bitumen. It barely moves and if it does you never see or feel it.
Evil, as Stephen King says, has a way of popping up full-blown and ready to go. Saving, which is the direct opposite of evil (that title goes to wastage), takes time, slowly dragging itself into use. But like all things good, the pain usually comes before the gain. This means that no matter what happens, you must strive to save.
But like all things in life, you cannot plan for the future and sometimes misery brings along its distant relatives into your life to keep it company. Sickness and other crazies can wipe out your savings no matter how prudently you save. If this happens to you, head over to our website or download our app for a quick salary advance to sort yourself out in case your savings run out. We got your back.
Try to invest
Investment, an offshoot of savings, is the act of purchasing assets, which might be in the form of land, for example, to earn a return on the money you invested. The sole aim of investing, as opposed to saving, is to increase an individual’s wealth.
To better manage your finances, you are better off if you learn to invest prudently. One of my favorite lines in investing is by Warren Buffet, the CEO of Berkshire Hathaway. He said, “I do not look for six-foot poles to jump over, but rather one-foot sticks to walk over”. This means that it doesn’t have to be complex. But like all things good, investment can be difficult and mind-boggling at first. Dogged determination can get you far, and might go a long way in helping you dodge the glaring blunders that novice investors make. Time spent on the internet, or on books will go a long way in helping you figure out the best investment vehicle.
However, if it’s all a conundrum to you, you can look for brokers and do your investments through them for they might be well versed in these matters. Remember, the goal is to invest.
Have an Extra Income
This might not be traditional in the financial management camp, but extra money has never hurt anyone. My thinking might be convoluted, but sometimes money can be so tight that no matter how prudently you manage it, it just never cuts it.
To loop around this, I think you should look for extra income if you can get it, that is. A side hustle will give you the peace of mind to better manage your affairs, for that too is the purpose of financial management. This side hustle, be it a business or a skill that you’re good at, will provide that extra oomph you need to live comfortably.
If you need funds to start your side hustle, you could head over to our website or download our app to get funding to unlock your potential.