bank info plan your finances

Whether you earn a little or a
lot, it ’s always wise to budget
and plan your finances
smartly. Common mistakes
that most people would make
when it comes to money is
getting too deep in debt,
paying bills late, and not
knowing how to save for the
future. You can avoid making
these mistakes by always
keeping track of where your
money goes and knowing what
you can spend on.
Here are some steps that you
can use for managing your
money wisely

Step 1. Set your financial goals

Financial goals reflect things
you want to do with your
money within a certain period
of time. Setting these goals
will help you understand the
value of money and
encourage prudent spending.
Be sure to know how long you
should plan for each goal.
Are they short, medium or
long term goals? Which one of
the following are your
financial goals?
Buying a house
Buying a car
Starting a family
Child’s education
plan
Traveling
Medical and Health Insurance
S

Step 2. Know Where money goes to

After setting your goals, start
developing a spending plan so
that it ’s easier to achieve your
goals. Remember that your
aim is not to cut your budget
but to note the direction of
your spending.
With this you will know:
Where and how you spend
your money
How much you owe monthly
How much is left at the end of
the month

Step 3. Asses your spending habits

If you find that you have
nothing left at the end of the
month, it ’s time to assess your
spending habits. Look through
your list of expenses and
determine if they are a
necessity or luxury item.
Look out for the following
warning signals of bad
spending habits that may lead
to real money problems:
You use your savings to pay
current bills
You take new loans to pay for
old ones
You owe more than you earn
You buy on impulse even when
you know you cannot afford it

Step 4. Write down your spending plan

A spending plan can help you
manage your finances. You
can also target areas where
spending is out of control and
also set a clear path for
saving.
You can start making your
own spending plan by using
this simple guide:
Establish your monthly total
income
Add up your total expenses
including fixed monthly bills,
loan repayments, rentals and
daily living expenses, etc
Put aside a fixed sum of
money to meet emergencies
or seasonal expenses (e.g.
school fees, road tax,
insurance renewals)

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