Most of the time, people ignore financial advice either because of ignorance or overconfidence, amongst many other reasons.
However, the Covid-19 pandemic has become an eye-opener as to how bad a situation can go in a matter of time.
The following are some helpful financial tips you can make use of:
Have a Budget
Most people claim to have a budget but sticking to it remains a difficult task. To ensure that you stick to your budget, keep receipts and write down expenses. This allows you to track your spending easily. It is essential to know where your money goes.
So, start drafting a budget from today. If you do not have a steady income, try writing a list of what you need every time your income comes in, ensuring that you allocate money to each of your expenses starting from the most important one.
It also helps you avoid using debit cards all the time; having cash in your hands helps you keep track quickly, and you sure would notice when you become short on cash.
Have more than one source of income
The pandemic has indeed proven to us that one can not depend on a nine-to-five job. Ensure that you have diverse sources of income. Do not put all your eggs in one basket; try as much as possible to ensure that while you have a steady source of income, you also have at least two backup plans.
Have an emergency fund
Emergencies are not an issue of ‘if’ but of ‘when’. Each month, you should save at least 10% of your income as your emergency fund; the goal is to get enough to carry to the budget for at least 3-6months. Your emergency fund should be kept in an account to help it yield interest over time.
Life insurance and Health insurance
It is important to have life insurance and health insurance as soon as you can get one. This is wise as one cannot predict one’s health or death. It is also important that you take care of your health, avoid substances that can cause complications in your body, going for regular check-ups so that any ailment can be discovered early.
Set financial goals
Your financial goals should be clear and a review should be carried out regularly to see how far you have gone and what you still need to do. If you are interested in buying a car, write it down and plan toward it.
Note that it should be a car that suits your needs and not your wants and it should also fit within your budget. If you’re taking a house mortgage, be sure that it is one that won’t bleed you dry. Plan and save towards such goals.
Pay your debts on time and avoid acquiring debts that you may find difficult to pay when the time comes. After you clear your debts, avoid spending without regard for the rainy day just because you have no debt at hand. And before getting a loan, ensure that you process all the details involved and that you truly understand what you are going into in order to avoid complications in the long run.
Lastly, be generous. Give to people and have the mind of not expecting anything in return. Whenever you also find yourself in a position to assist someone please do so. It is said that givers never lack, so, give and give and give