SET FINANCIAL GOALS
When it comes to finances, people generally fall into the following groups. Where do you Fit in?
Planners control their financial affairs. They budget to save.
Strugglers have trouble keeping their heads above rough financial waters. They find it difficult to budget to save.
Deniers refuse to see that they're in financial trouble. So they don't see a need to budget to save.
Impulsives seek immediate gratification. They spend today and let tomorrow take care of itself. They couldn't care less about budgeting to save. Knowing what kind of financial manager you are will help determine what changes to make. To maximize your wealth-creating ability, you want to be a planner, Iike AbuBakar.
AbuBakar is a family man with a child. "I have to budget in order to live on my modest income. I have a little notebook I use to track where every kobo goes. Saving is very important to me. When my son was born, I started investing every month in a Takaful fund for his university education. I have bought my own home and provided for my son, and my cheque has never bounced. You must have common sense regarding money!"
Abdullaah, by contrast, is an impulsive. Abdullaah has a good job, makes good money and lives a pretty comfortable life, but his bank statement tells a different story. He has no savings or investments, owns no property and has no plans for retirement. Plus, he's got a lot of debt, lives from paycheck to paycheck and doesn't budget. You can choose to be like Abdullaah, or you can follow AbuBakar's road to wealth creation by learning to budget and save.
A budget allows you to:
Understand where your money goes.
Ensure you don't spend more than you make.
Find uses for your money that will increase your wealth.
To develop a budget, you need to:
Calculate your monthly income.
Track your daily expenses.
Determine how much you spend on monthly bills.
Track day-to-day spending
One day, Abdullaah, the impulsive, realixed that to create wealth he had to become more like AbuBakar and plan his financial future. To start, Abdulllah analyzed his finances to see how much money he made and how he was spending it. He set a goal to save N2500 a month to put toward his wealth-creation goals. First, he calculated his income. Then he added up his monthly bills. He also carried a little notebook in his purse for jotting down his daily spending.
You can study your won spending habits by tracking your daily expenses. Be sure to include items purchased onn credit. As well as those purchased with cash or cheque.