Quote of The Day: Wealth is the product of a man’s capacity to think – Alexander Pope
Day 4 – Challenge 4 – Financial Bliss
Where do I start from?…*thinking*…Let’s start with the basics. Just a few questions to consider before I share my wealth management process (that’s what they’re calling it these days).
‘How much money do you need to reach your goal?’ ‘How much do you have?’ How do you plan to get where you want financially?’ ‘Have you started?’
Money is gold! it is important, necessary, priceless and it is everything…well, God first, after-all, He is the one who gives us the power to make wealth.
Straight to the point here guys. You should have a substantial amount of money saved up somewhere (not the emergency fund), the first step in financial stability is Setting Financial Goals. Make a plan to save a specific amount of money before a specific date or age (Make short-term goals)…remember to make your financial goals ‘achievable’. Financial goals don’t necessarily mean ‘savings’, goals like paying off a debt in two years or achieving financial independence in five year…goals like that cut it.
Saving is very important…very. It directly impacts our position in the long run. You don’t want to end up thirty and broke. By 30 or whatever, how much do you want to have to your name?…well, start already. Set a financial timetable and be specific with what you want and when you want it.
The main problem with saving from what I’ve observed is that we get so wrapped up in settling bills and debts and allocating funds to this and that, and by the time we are done, we have nothing left to save. There’s a better method.
Like we already discussed in Day 2, priority is everything. Start with what is important, necessary and urgent. What is important to you financially, are you starting with your liabilities or your assets, are you saving or investing, are you planning for the future or just leading a fun, luxurious lifestyle with no plans for the future?
My mum had a philosophy; ‘10% of your allowance or your income must go to God. Another 10% should go straight to the bank every month…’ Let that be your financial obligation to yourself. Set 20% aside every month (you’ve got to pay your tithe and save). The important part is this; whether it is income or allowance, you need to plan. Make a list of weekly or monthly expenses (Your savings %, tithe % and emergency fund should top the list), calculate and allocate funds. This is your ‘Cash-Flow’, every expense should be documented in it.
‘Your financial personality/place is everything, it’s time to manage it like a CEO.’
What I have done since I don’t trust myself is that I use an Automated Process. I linked a fixed deposit account to my chequing account and my 10% savings is automatically transferred from my account to my ‘Fixed’ account monthly. I call it my ‘retirement plan’, it’s good to start early :). You can easily set this up with you bank if you don’t already do it.
So when I draft my cash-flow, my ‘retirement fund’ becomes an asset, so it gives me room to indulge a bit. I put figures to expenses (liabilities) , sum up and set the sum aside.
When you spend, be sure not to exceed the sum you allocated. No more, preferably less. And try to keep two emergency packages; one stashed somewhere you don’t remember and one for immediate emergencies (kept on you at all times-cash or card-whichever works for you)…
Budgeting is important because it kinda keeps you within a spending premise. Sometimes, when you plan your income/allowance against your expenses, you have a little left (balance)…miraculously! Don’t buy that shoe just yet. Have you invested, have you thought of which reward is greater-shoes or shares? have you? Well you should.
Proper wealth management is important, it is achievable, not easy ‘achievable‘ and it requires discipline and commitment and it improves financial stability and independence.
I don’t want to drag this on too long so I’ll leave you with this; you’ve got to pay your tithes. When you give God His 10% of your income/allowance, it goes a long way in securing stability in your financial future.
Set achievable financial goals, make plans, draw up a timetable, create a monthly cash-flow (record everything) to keep track of all your financial records and automate your saving process. It works…I hope this helps one way or the other.