Money is the real deal! Money is really not the root of all evil, as many may erroneously think. But, the lack of it can be the root of all evil – even troubles untold. Well, getting money is not as hard as managing money. In other words, you can make all the money you want but when you are not able to manage same, you will soon go back to your impoverished life. Good money management is what sustains wealth and is one of the skills of the rich. In this article, YoungNigerian.com, expounds why many run into financial difficulties and end up being broke despite having previously had money.
Spending more than you earn.
A good financial manager spends less than the money he makes. To increase your spending, you will need other side job. With multiple stream of income, you can afford to increase your spending to cover other essential items and services .But whatever the case, do not live above your means. Do not spend more than you earn.
Lack of financial plan
Many think once they make money there may not be a need for a plan! Having a good financial plan helps you to spend smart and save well. It is advisable to have a short, medium or long time financial plan. Set a target of what you want to achieve within a reasonable timeframe putting your income into consideration.
Photo Credit: Alexander Mils
Eating your tomorrow today
Many run into serious trouble eating up all their life’s earning without sufficient retirement plan. Retirement simply means that period in your life where you will not be able to work actively as a result of old age, redundancy and government policies. In Nigeria and most countries of the world, once you reach certain age in service, for example, 35 years or you attain age 70, you are to retire from service. Sometimes you are forced to retire because your services are not needed again. It is necessary to start making retirement plan early. Even if you are self-employed, think of the future when you may no longer have the strength and energy to actively work and earn as much as you used to. The earlier you start saving for the future, the better for you. Do not eat your tomorrow today!
Spending with rashly!
This is very important. It is like the earlier point made, lack of financial plan. Learn to place limit on the amount you spend daily. Do not spend all your earnings in one gulp. Squandering your income is the surest way to poverty. Be deliberate about your spending. Spend when you need to spend and avoid impulsive and unwise spending.
Too much borrowing.
No one gets rich or maintains wealth being in a debt. Too much borrowing affects your finances and puts you in trouble all year long. Do all you can to borrow less, or avoid it entirely except you are compelled to in the course of carrying out your legitimate business and you are certain you will pay back as when due with accrued interest, if there is any, and still make your profits. If not, avoid it. Borrowing only makes you a slave to the lender.
Photo Credit: Alice Pasqual
Spending more than you earn.
A good financial manager spends less than the money he makes. To increase your spending, you will need other side job. With multiple stream of income, you can afford to increase your spending to cover other essential items and services .But whatever the case, do not live above your means. Do not spend more than you earn.
Lack of financial plan
Many think once they make money there may not be a need for a plan! Having a good financial plan helps you to spend smart and save well. It is advisable to have a short, medium or long time financial plan. Set a target of what you want to achieve within a reasonable timeframe by putting your income into consideration.
Eating your tomorrow today
Many run into serious trouble eating up all their life’s earning without sufficient retirement plan. Retirement simply means that period in your life where you will not be able to work actively as a result of old age, redundancy and government policies. In Nigeria and most countries of the world, once you reach certain age in service, for example, 35 years or you attain age 70, you are to retire from service. Sometimes you are forced to retire because your services are no longer needed. It is necessary to start making retirement plan early. Even if you are self-employed, think of the future when you may no longer have the strength and energy to actively work and earn as much as you used to. The earlier you start saving for the future, the better for you. Do not eat your tomorrow today!
Spending with rashly!
This is very important. It is like the earlier point made, lack of financial plan. Learn to place limit on the amount you spend daily. Do not spend all your earnings in one gulp. Squandering your income is the surest way to poverty. Be deliberate about your spending. Spend when you need to spend and avoid impulsive and unwise spending.
Too much borrowing.
No one gets rich or maintains wealth being in a debt. Too much borrowing affects your finances and puts you in trouble all year long. Do all you can to borrow less, or avoid it entirely except you are compelled to in the course of carrying out your legitimate business and you are certain you will pay back as at when due with accrued interest, if there is any, and still make your profits. If not, avoid it. Borrowing only makes you a slave to the lender. It wrecks your financial life and puts you in more trouble.
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No reserve fund
Everybody should have a reserve fund or what many refer to as ‘emergency fund’. Emergency can befall anyone. We can all find ourselves in some situation that requires urgent financial obligations. Failure to prepare for this makes you run into dept. We should prepare ahead of time and have money reserved for emergency purposes.
No reserve fund
Everybody should have a reserve fund or what many refer to as ‘emergency fund’. Emergency can befall anyone. We can all find ourselves in some situation that requires urgent financial obligations. Failure to prepare for this makes you run into debt. We should prepare ahead of time and have money reserved for emergency purposes.
Source: YoungNigerian.com
