5 important tips you need to become financially safe
Are you worried about your personal finances? You need these tips to help you understand how your money works.
Everyone knows how long it takes to work for money and have the cash in one's account, but the excitement that comes with spending money can render you penniless in no time.
However, to avoid sending yourself into a situation that forces you to start borrowing money from neighbours and colleagues few minutes after making it, you need to understand these five tips on financial safety.
1. Be financial literate
If you don't know how personal finances work, you'll most likely expose yourself to financial stress. Understanding these is what financial literacy is all about.
Financial literacy is the ability to understand how money works: how you make it, manage and invest it, and also expend it. You become financially safe when you have the basic understanding of how your money works.
2. Understand your own financial situation
Apart from having the knowledge of how your money works, you also need to have a detailed understanding your own financial situation.
For instance, you need to know how much you make every month; how much you spend and on what; the outstanding debt you have as well as your savings. Economist believed that financial self-awareness contributes to positive financial outcomes.
So, if you are not aware of your financial stature, it is worth sitting down and acquiring an in-depth understanding of what your current situation is, regardless of how good or bad it is.
3. Pay attention to your personal finances
Having the basic understanding of your financial situation is not enough if you don't pay attention to your personal finances.
You know why? Paying attention to personal finances discourage you from making hasty financial decisions.
For example, if you have a budget to spend N20,000 in one month, and you keep track of how much you have spent, you won't make impulsive buying that will force you to exceed your budget.
4. Play active role even when you delegate financial decisions to others
Some people tend to leave financial decisions to other people perhaps because they are scared of what the consequence would be or they or because they lack interest.
This situation is common in a marriage, in which one spouse shoulders all the responsibility of making and executing financial decisions, while the other plays no role at all. This type of arrangement can be very costly if something happens to the financial decision maker in the marriage.
ALSO READ: 5 reasons you're always broke before payday
5. Learn how to save regularly
The importance of saving regularly cannot be over-emphasised. Most discussions about financial tips always revolve around saving and here is it again.
If you want to be financially safe, you must learn how to save regularly, avoid impulsive buying or excessive shopping, invest wisely, and avoid making bad financial decisions.
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