12/05/2025
PRINCIPLES TO ADOPT IN MANAGING YOUR FINANCE
1. NOTE DOWN YOUR TOTAL INCOME:
Many people do not know how much they earn in a month or week, which leads to reckless spending. They often believe their salary is their only income. However, any money that enters your account and is meant for you is part of your income for that period. Keeping track of your total income helps you control your spending.
2. USE THE 50-30-20 BUDGET PRINCIPLE:
This budgeting method involves dividing your income into three categories: 50% for Needs (essential expenses), 30% for Wants (non-essential but desirable expenses), and 20% for Savings/Investments (including emergency funds). Prioritizing needs over wants ensures financial stability.
3. TRACK ALL YOUR SPENDING:
Keep a record of every expense, no matter how small. This helps you understand where your money goes and prevents unnecessary spending. Be mindful of even the smallest expenses, like a sweet on the street or a token given to a cousin.
4. AUTOMATE SAVINGS:
Set up an automated savings plan with your bank. This allows a fixed percentage (e.g., 20%) of your income to be deducted and saved without manual effort, making saving easier.
5. BE CONSISTENT:
Stick to the 50-30-20 budget rules once you start. Consistency is key to gaining control of your finances over time.
6. SET ANNUAL GOALS:
Establish achievable financial goals every year. These goals keep you motivated to save and manage your finances responsibly.
7.MAKE A LIST BEFORE GOING TO THE MARKET:
Never go shopping without a list. Prioritize items based on importance, keeping price fluctuations in mind.
8.AVOID BEING AN ATM FOR FAMILY/FRIENDS:
While supporting loved ones is important, do not take on financial burdens you cannot afford. Prioritize your own financial stability first.
9. INVEST IN ASSETS, NOT LIABILITIES:
Avoid buying expensive items like cars if you do not have a reliable source of income. Invest in assets that can generate value over time.
Thank you for reading. I believe these principles will help you manage your finances wisely, avoiding unnecessary spending and waste.
CHUKWUEBUKA HENRY
12/05/2025
