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For your household to attain its long-term financial goals, you must understand and practice wealth principles in your spending and saving. Knowing where and how you spend your money becomes simple once these principles are adopted. This is why personal wealth education is crucial in our daily financial decisions.
First of all, you have to determine your total day-to-day spending in a month. Determine which of your expenses are necessary and unavoidable, which can be enjoyed once you’re financially free and which ones seem like a depreciating liability. A good spending plan allows you to control where you dish out the money you earn.
“Prosperity depends much more on how you spend than on how much you earn.” — Financially Fit CEO, Steve Down
Do you have a spending plan tied to your financial goals? Well, if not, here are some easy steps to create one:
Your spending plan is a true reflection of what you have been prioritizing. Regardless of your past, you can still spend your way to wealth by choosing wisely. Let your financial goals guide your spending. This creates spending patterns that allow you to avoid bad debt, clear debt, gain financial security and create wealth.
It is better to spend on luxuries once you have a solid emergency fund worth 3 months of expenses, steady income streams and a good saving habit. Be accountable to yourself regarding your spending habits. Before you decide to purchase or order a service, consider whether it is a necessary, prudent and disciplined way to use your hard-earned cash.
Your commitment to being better may mean saying no to impulse shopping, credit card purchases uncontrolled borrowing or gambling.
Also, remember to identify means of automating your savings. This will help you avoid spending what you don’t have or cannot afford especially with credit payments.
When selecting your savings account, consider the following:
You must set up multiple savings goals, and track your progress against each separately. Your goals should define how much money you plan to have saved, and after what period.
You may begin to feel impatient because of the slow increase in your savings balance. Remember, change takes time, however, there are measures you can take to increase the amount of money saved in the household and grow your savings faster.
Financial literacy helps you manage your household finances, achieve your financial goals and plan your future. Your partner/spouse or your children deserve to understand good money management. This in the end helps us to appreciate the value of money as we spend what we earn
At Financially Fit, we believe financial success begins with you taking charge of your finances. As Financially Fit’s CEO, Steve Down would say, “Prosperity depends much more on how you spend than on how much you earn.”
Leave a comment on your highlight on a spending plan and share this article. Remember to focus on your “why” every time you spend.
Financially Fit
Riverside Drive, Nairobi – Kenya.