What goes around comes around they say, and in our fondest dreams we hope that money spent that goes around will eventually come back around to us. Reality says, “dream on,” and tells us that money takes the course of a river, or a waterfall maybe.
We can, however, control the cash that flows through our household before it our very last cent decides to jump off the cliff with none to follow. But in order to even begin crafting a game plan, you need to know your players, the field and the rules of the game.
Rule #1:
“Dare to struggle, dare to win.”
You cannot change your financial situation if you do not face it head on. Millions of people are living in financial oblivion. You need to know what you have to take control of the situation. Open up those bills that you’ve been stacking on the table, spread the statements over a table and start piecing your long neglected financial puzzle together.
Then you can begin on your budget.
Rule #2:
“Make two cents spend one, result: prosperity. Make two cents spend three, result: misery.”
No, we didn’t come up with the sentence. Common sense, really, yet it eludes even the brightest minds sometimes. If you want to be secure financially, spend less than what you earn; else you could be taking the high road to misery by signing off amounts two times your pay cheque.
Why can we not adhere to such a simple rule? There are various reasons out there, and we often become victims of impulse buying, attention seeking, retail therapy or something of the sort. Watch yourself when you shop, why are you buying something? Is it a want or a need?
Rule #3:
“Failing to plan is planning to fail.”
But what is a budget? It’s really a plan to tell yourself how you’re going to put your hard earned money to good use, how you’re going to survive the rest of the month/year/decade, and what luxuries you can afford. There is no one-size-fits-all budget that will work for everyone.
There are recommendations, of course. A good way to distribute your finances is to remember the essential, the necessary, and the nice-to-have. That new Prada handbag? Definitely very nice-to-have. Some financial advisors recommend allocating your funds as such: Home – 35%, Transport – 15%, Debt – 15%, Savings – 10%, Others – 25%. You can use this as a guide and adjust it to reflect your needs, take care not to let the Other slice of your pie become the pie.
You have now graduated. Really.
Don’t drown in your financial whirlpool! http://t.co/xvi3yx8l