Take Control of your Personal Economy

In  times like this, where there is decline in global oil prices, dwindling foreign reserves, security concerns, increased cost of living, unemployment and so much negativity concerning the economy. What should our attitude be? Should we allow this crises drown us? I don't think so except we allow it. It is very easy to blame your financial situation on the economy and complain about everything but even in the midst of this crisis, money is not diminishing. It is only changing hands and moving from one pocket to the other.

You may not have control over what is going on in the external economy cause its outside your sphere of influence but you have control over your own economy. My own economy is my personal economy. Your personal economy has to do with all those things you care about - your family, your kids, your career, your finance, retirement, relationships...

A solid financial foundation will help you weather any future ups and downs of our nation's economy. You need to take steps to improve your financial situation. Don't get swayed by the happenings in the
economy. The one economy you can change is your own economy. Be in control of your financial situation.

Few Tips in taking control of your personal economy:

1. Be thankful: Be thankful for all you have. If there is life, there is hope. Its only those that are alive that can make a living. Be grateful for the seemingly little things. When you are grateful, it opens you up to ideas that can attract money. You can be creative and positive with a grateful heart.

2. Your attitude: Attitude is how you respond to everything in life. You sure have control over your attitude. Your beliefs, thoughts and feelings shape your attitude and ultimately control your life. How you make decisions about your life is in your control. e.g. spending less than you earn isn't something that happens to you. It is something you make happen. It is a decision. You can choose how you will conduct your life and manage your money. The decisions you make during this period will either make or break you. Be careful of your choices. You can control everything that the global economy throws at you if you are in tune with your own personal economy.

3. Focus on what you can control- Like I said you cannot control the nation's economy but you can control your own economy. You have control over your money. Have a spending plan.  You simply ''prespend'' your paycheck on paper before you part with any of it. Sit down with your money and tell it where to go (Budget). The essence of a spending plan is to prevent overspending. We tend to buy things we don't need. Critically look at areas in which you can cut or trim your spending. Analyse your needs and wants, and know what you need per time. Impulse buying will hurt your hard earned money. Be wise and exercise some control over your spending.

4. Create Value - What products or services can you offer? If you are currently in an employment, be the best you can be and if you are out of job, don't lose faith and don't be idle. Volunteer your services in any way you can. Do not make excuses cause of the economic crises, use it as an opportunity to sharpen your skills and explore new areas. Look within, what's your passion? Do you have skills you can provide in exchange for value. Be a problem solver, be a solution provider. Find ways to add value and get additional income in return no matter how hard the situation of the economy is, Value is constantly being created even in the midst of crisis.

5. Multiple streams of income - There is need to have multiple streams of income. Having just a single stream of income can only sustain you for a while most especially if you are a salary earner. You must plan on getting more income streams to be able to meet up with your expenses. Managing one's finances is one critical part of a healthy personal economy. How well do you manage what comes into your account every month. Start with the basics, track all your money coming in (total income) and everything going out ( total expenses). If you don't take control of your money, your money will take control of you. Understand your unique circumstances, apply strategies to help you stay on track. Hold yourself accountable for everything that comes into your account and all that goes out. You need good money management skills to be able to manage your streams of income.

6. Savings - You can read my earlier article on pay yourself first. When you receive money from any source, before you think about spending it, transfer at least 10 percent (or more) into your savings account. no questions, no excuses and no exceptions. Anyone can put money aside, at any level of income. You just have to do it if you want to take charge of your finances and be consistent with it. In no time, this will become an habit that you repeat so often it becomes automatic. Spend less and save more. If you need to open an account for it, please do. Savings is yours to plant for the future. Ensure you have enough to take care of you and your family in the future.

7. Invest - Do not stop investing cause of the situation of the economy. There are some investments you can still be involved in and get returns no matter how small. Stock market will recover and you can continue to grow your money. You can invest in real estates, mutual funds etc. Get counsel from some investment firms. Ensure you don't put all your eggs in one basket. Spread your investments.

8. Be a giver: We make a living by what we get but make a life by what we give - Winston Church hill. Giving is gratitude in action. Your greatness is not what you have but what you give. Do not use the economy crises as an excuse not to give. Look out for those that are in need and be a blessing. We are not all at the same level. Be a vessel of blessing to others.

9. Stay out of debt - Debt should be avoided whenever possible except you are borrowing to invest (ensure the investment is worthwhile). Don't borrow to consume. Borrowing money is not wrong, but it should be done advisedly and with tremendous caution. If you are presently in debt, you must find a way out as quick as possible. Limit your debt and plan on how to pay back.

10. Emergency fund: Have an emergency fund set aside that will cover you in case of unseen circumstances like job loss, health, unexpected car repairs and other things life throws at you unexpectedly. Ensure you have enough to cover like 6-12months expenses. There is a peace of mind you have when you know you have some funds you can fall back on rather than borrowing from family and friends.

11. Downsize your lifestyle- This has become necessary to survive this season. I wouldn't be surprised to learn that you have cut your expenses and you can't cut further. Your efforts is appreciated. You've got to spend less than you earn.
Dave Ramsey once said ''We buy things we don't need with money we don't have to impress people we don't like. There is no need keeping up with the Joneses. Let them go. It is your life, guard it jealously and do what you need to do to ensure you are not buried in debt trying to impress people you don't even like. Do not be a victim of ''lifestyle inflation''

Starting from where you are right now, you can take control of your finances. You have the power to control your personal economy.


Photo credit: Google

Read More

Want Financial Freedom? PAY YOURSELF FIRST!

In my quest for financial security, I learnt this at an early stage of my work life that I need to pay myself first before paying bills. This has worked for me a great deal. I don't negotiate it. It is a priority for me. Kudos to my Dad who taught me when I was growing up that I shouldn't eat up all that I earn.

 I have consistently done this for years. You can't do this and be broke.

I believe this is one of the reasons why most people struggle with their finances by not paying themselves first. How can you work or have a business and not set aside some certain amount for the future.

 If you have tried to pay yourself when planning your finances and you discovered that it has been a struggle, it might be that you settle yourself last after expending on so many other things like rent, vehicle maintenance, groceries, eating out, movies etc

When you pay all other expenses first before you pay yourself, usually you discover there is no money left over for you. That is why people live from pay check to pay check. Eating their future in the present.

Here is an essential tool that will work for you: PAY YOURSELF FIRST. This is one of the most powerful financial habits of wealthy people. This is the first pillar of money management. Some financial experts will tell you to set aside at least 10% of your income. Successful savers have known this secret works and it is as simple like A,B,C.

You must put aside a certain % as savings away from all the income you receive before you pay bills or make loan payments. Whether you are a salary earner or a business person, honour and value yourself and set aside a certain % as savings. You may do more than 10% depending on the money that comes in.

Some of the excuses we give is because we think what we earn is small and so we don't bother to pay ourselves. Even those in business excuse themselves that they are just starting out, pay yourself from the profit that comes in from your business. If you keep making excuses, you won't even start at all.

If you don't start when you earn little you won't start when you earn much. You also need to know that you can't work all your life. There will come a time when you can no longer work. How will you fund your life?

HOW TO PAY YOURSELF FIRST:

1. Ensure you include savings as a fixed expense in your budget and fix an amount for it.

2. Create an account that is separate from your other accounts and Save what you pay yourself.

3. As soon as you receive your pay or when money is available, set aside a certain percentage (Do whatever works for you) or pay a fixed amount into this account.
 Ensure you do this before spending on anything else. You can set aside an automatic recurring transfer on your checking account to transfer the amount to your savings on a particular date. This will spare you from the temptation of spending it as soon as your pay check comes.

4. Once your savings is set aside, you can then expend on your fixed bills and spend the remaining on other discretionary expenses.

5. The money you have set aside in your savings account must be accumulated and invested. With the law of compounding, you wouldn't know what your funds can achieve.

Do not eat your future now. Start today and be consistent at it.

Save Wisely!

Read More

Money beliefs and attitudes

Ever wonder why one person is a big spender, another is a big saver, and yet another wants to stick head in the sand about their finances? What will believe about money impacts how we handle it. - Maria Lin

How you deal with money is determined by what you think about money.  What were you told about money growing up. What are your money beliefs? Could you write them down? You may not have thought about it but it's likely those beliefs are in your subconscious mind, be it positive or negative.

When I was growing up, I heard statements like "Money doesn't grow on trees", "Money is hard to get", "money is scarce", I never new those statements were unconsciously deep-rooted and realised it controlled the major part of my thoughts life about money. What I heard most were the negative beliefs more than the positive ones.

What goes on in your subconscious mind wields much power than your conscious mind. Most of these beliefs comes from what we learnt from our parents, what others say and what they would like us to believe. What you see and hear affects your life consistently,

E.g.  Negative money beliefs :
1. It is easier to spend than save money
2. There is a limit to how much I can earn
3. It is hard to hold unto money
4. Money is filthy or dirty
5. Money is scarce

E.g. Positive money beliefs:
1. It is easier to save than spend money
2. There is no limit to how much I can earn
3. It is not hard to hold unto money
4. Money is beautiful
5. Money is in abundance
                                    
Consciously or subconsciously, we choose the role money plays in our lives. So "We" not our money or lack of it are solely responsible for our attitudes, beliefs,action and happiness.

Who you are determines how you see things. Reprogramme your mind and have a positive belief towards money. If you see money as been scarce, it will be scarce. If you see it as abundant, then you have abundance.

Once you accept that some of the money beliefs you have are negative beliefs, you can begin to realign your thoughts towards positive money beliefs and let go of the false beliefs.

 It is a process of changing your money behaviour. Once you can realign your thought process towards positive money beliefs by believing money is good, money is in abundance, I can handle money, I can manage money. Then you are on your pathway to financial freedom.

Read More

Your Needs Vs Your Wants

YOUR NEEDS VS YOUR WANTS:

Many of the financial struggles we get involved in is as a result of our confusion between "Needs and Wants".
As you journey towards financial freedom, It is very important you are able to differentiate between your "needs" and "wants".

A need is something you can't live without e.g. Food,Clothing,Shelter, health care. A requirement for survival while A want is something you could do without, you strongly desire it but it's not essential for your survival e.g. Designer bags, shoes, going to movies etc. Kindly fill in ................. I am sure we can separate our needs from wants.

It takes a certain level of maturity to know what these needs are.
Have you ever been in a situation where you purchased a particular item and feel guilty after buying the item cause of the reality that such item is not really needed. I have been in such.

According to Karen McCall - A need sustains you and a want entertains you.

Most times when I go shopping and something grabs my attention & winks "buy me", I pause and ask myself is this a "NEED or a WANT"? It immediately helps me to focus on what I really need.

There are so many beautiful things out there calling your attention and screaming "buy me". Why not pause for a moment and look at those things critically.You must be able to decipher whether its a "NEED"or "WANT".
What do you really need in your life?

If you want to be financially successful, you must be financially disciplined. It's not everything you see you must buy.

You can treat yourself to some wants along the way, but do so when you can afford to, and enjoy those wants as the extras that they are

Develop the ability to delay short term gratification.

Be clear about your motives & intentions when you shop.
Make a detailed list of your needs/wants and review from time to time.
When you look at the "Needs" in your life, you tend to see that some things are not 'Needs" but "Wants". There are times when wants become needs.
​
Prioritise and have a scale of preference of your "needs/wants".

Separating needs from wants helps to get spending under control.

Ensure your needs are met first before indulging yourself with some wants and set goals for both.

I am not saying you should give up on your "Wants" cause you might need to indulge yourself once in a while, but to examine how much of your monthly spending is on "Wants".

When you are being drained financially just to maintain a flamboyant status then it becomes a big issue.

When you are under financial pressure consistently, it shows you are putting a strain on your finances.

Some people's "Wants" is other people's "Needs", your focus should be more on your "Needs". .


Spend Wisely!

Read More

Your money personality

How do you perceive money?

What are your money values?

What motivates your financial choices?

Do you have so much money and you can't stand the thought of spending it? Do you have trouble coming out of debt? Do you have issues squandering all your income and have no savings at the end of each month?

We all relate in different ways towards money depending on the level of influence we've had from our upbringing. How you relate to money will definitely affect your finances.

I was able to detect my money personality at an early stage in my work life and it has impacted my financial choices greatly.

Your money personality affects the way you handle money. Your awareness of your money personality is the first step in creating a positive change towards your finances.

If you can detect your money personality, you will be able to make better financial decisions.

Our money management habits can fit into 4 major personality types. I would like to share some excerpts from “Money personality types” by Olivia Mellan 

The 5 Money personality types:

1. Spenders - Believe money is meant to be spent. Sometimes they spend more money than they should or live above their means. They live in the spur of the moment. No wonder nothing is in their account at the end of the month. They wonder "where does it all go". Spenders values wants above needs. It may be difficult to put aside money for future financial goals.

2. Savers - Love to save money. They are careful about spending money; they believe you have to prepare for the future. They are organised with their finances. Conservative with where they chose to put their money, preferring a high interest savings account over investments such as mutual funds.

3. Money monk - They think that money is dirty and bad, and that if you have too much of it, it will corrupt you. They identify with people of modest means rather than those who amass wealth.

4. Amasser - If you tend to be a money amasser, you are happiest when you have large amounts of money at your disposal to spend, save and invest. If you are not doing any of these, you tend to feel empty. You tend to equate money with self worth and power, so a lack of money may lead to a feeling of depression or failure.

5. Avoider - If you tend to be a money avoider, you probably would have a hard time balancing your check book, paying your bills and leaving your financial obligations till the last minute. You may not even have a budget or keep financial records. You won't know how much you own, owe or spend.

Which money personality describes you? How can you use this awareness to build a stronger financial future?

Read More

Money Basics

Money, Money, Money, one word that carries weight in our every day lives. Hardly can you go all day without talking about money or somebody talking about it. We are all economic agents cause we deal with money transactions. Money is an important resource in our daily lives.

The need for money cannot be over emphasised cause it's a medium of exchange for products/services offered. Every one, wants it, work for it, dream it. Like they say, money makes the world go round. I think it does. We all need it to put food on the table, pay children's school fees, go for vacation, household expenses.......we just can't shy away from our need for "money". 

Our wants are unlimited even though all cannot be satisfied at once but then we worry about paying bills, have a feeling of inadequacy over our income, feel guilty at spending. Polls frequently show money to be a leading source of worry, and one of the main causes of disputes between couples.

Money is a representation of Value

 It's really funny how even the rich aren't immune to this money worry, thinking of how their wealthy lifestyle will be maintained to whether their inheritance will not be  mismanaged.

We have all made money mistakes at some point in our lives. We have developed various mind sets, attitude and behaviours about money while growing up which are even unhealthy and needs to be excoriated.

Money is a subject that provokes strong emotions but we rarely discuss it even with our friends and family. Perhaps, financial therapy just offers a much-needed platform to discuss these feelings with someone who won't judge or criticise us.

In these times of economic recession, when there is decline in global oil prices, high rise in forex rate, dwindling foreign reserves, unemployment, increased cost of living and increased cost of goods and services. We must not lose faith. This is the time to take responsibility for our finances.

I seek to empower people regarding their finances. I hope to inspire kids, teens, men, women to attain financial security and independence. 

Let's journey on this ride together.......

We will succeed! 

Read More