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Road to personal finance success

By | June 29th 2009 at 00:00:00 GMT +0300

By Catherine Muraguri

Most people wish to attain financial security and this is the reason why they go to work or run businesses.

Here are a few financial habits that will ensure your money works for you and get more out of life.

Start saving as soon as you get your first job — and probably before you have major responsibilities in life. Financial advisors recommend that you put aside ten per cent of your income. If you are a single person with no major responsibilities, think about putting aside more than ten per cent of your income. This way you will build a nest egg that may come in handy in future. Saving will also ensure that you have some money for emergencies and you will not have to take loans. Even if you save small amounts every month, these can really build up over time and earn you interest.

Under control

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Get your debt under control. Loans can and do help many achieve great things in life. Many people would not be able to own prized possessions such as homes or cars if it was not for the availability of loans. The key, however, is to be able to afford the debt and can keep it under control. An uncontrollable debt is one of the greatest setbacks to achieving your financial security. The faster you pay loans, the faster you will be on your way to financial success.

Check your spending habits. Know where every shilling goes. Account for every shilling and the thousands will take care of themselves. Some purchases are not necessary; they are wants and not needs. Buy items that will add value to your life. Also see where your money can go the extra mile for example consider purchasing items in bulk or wholesale instead of retail.

The basic premise of investing your money is that it will appreciate in the future thus helping you to achieve your short and long term financial goals. Most investments have fees, charges or other costs associated with them and that are sometimes not obvious.

Do your homework as these costs can have an impact on your nest egg.

Always invest after doing your homework and not following the crowds especially when initial public offerings are announced. Also watch out for investments that promise returns that sound too good to be true.

Your goals

Check your financial progress regularly to ensure you are on course to attaining your goals. Life changes and so a little time off taken to see how you are doing say every quarter or half yearly will show you areas where you need to improve and put stops to the leaks if need be. Significant events like marriages, deaths and having children can also have an effect on your finances so revisit or check your financial plan regularly.

Sometimes you might need help in managing your money. You may need help in getting your debt under control or making decisions regarding your future.

Whatever the case, talk to a qualified financial planner who will assist you in making the right decisions regarding your money.

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