Like everyone else, you would have had several action-packed broke series, where you are afraid to even check your bank account. And Nigerian banks makes it all worse, with their charges on your zero account balance – this is called over-broke. At that moment while you are lamenting on your condition, a friend suddenly calls you to lend them some money, and you are here thinking of who can come to your rescue before your next payday. The hardest pill to swallow is that your next salary is fourteen days from now. That fourteen days can be like fourteen years. Oh! I almost forgot to add our Nigeria employers, you know Nigerian employers too well, you would have to pray to get your salary on your payday. We have all been there. “Going Broke” is a seasonal movie we have all been featured in at one point or the other. These days it appears the fear of going broke is the beginning of financial common sense.
Well, as your trusted financial advisor, we want to share with you five tested and trusted “how’s of not going broke”. It works like magic. The only thing required is letting go of the fear of not going broke. And start applying these hacks immediately.
- Earn More Spend Less
Typically, we go broke when we have little or no cash flow. The simple logic then would be to increase the inflow and reduce the outflow of our cashflow. As simple as this might sound, most people find it difficult to practice. Impulse buying negatively affects our cash flow. To increase your cash flow, you have to start considering having multiple sources of income. And have a goal to start earning passive income. In subsequent articles, we would be sharing ways to have multiple income streams.
- Budget Religiously
You might not be aware of the Parkinson Law, but it actually applies to your finance. The money version of the law states that “Expenditures rise to meet income”. If this holds true in most instances, how then do you manage the reality? The first thing is to admit that, you crave a better life that would always come when your income rises. However, the foolproof to this natural craving is to “budget religiously”. Never spend without a budget. What a budget does to you is that it helps reduce the risk of wanton spending or impulse buying. Budget even before you spend a dime.
- Save to earn more
The mistake people make after saving is, they save to spend. Classical literature on personal finance – The Richest Man in Babylon advises that savings are seeds for the tree of wealth and its yields are more seeds to grow your wealth tree. Do not save to spend but rather save to invest and re-invest the returns of your investment. This is the start of your journey to earn passive income.
- Keep an emergency fund
Are you familiar with the classical story of a very wealthy man named Job? There would always be unpleasant days. While we cannot in ourselves prevent the occurrence of days like this, we can prepare for it. It is wise to keep an emergency fund as a financial safety net in times of sudden misfortune. Such fund is set aside to cater to emergency health needs, career trials, family challenges. Prepare for times like this.
- Keep an eagle eye record
A biography of John D. Rockefeller, the oil titan reported that he kept a daily record of all his expenses including charity donations. He attributes his ledger has been sacred. One common habit among financially successful people is that they monitor what brings in money and what takes away money. This way they are more responsible for their financial outcomes.
Now, you aware of these tested and trusted hacks to stay financially strong. Now is time to start applying these and stop being broke!
