Financial matters are uncharted territories for me. But of late as the kids are growing up, I can’t ignore the questions in my head about the financial future of my family. How to not fail financially is at the top of my list.
One fallacy we have about time is that there is a chunk of it waiting for us in future, so we put off everything until later. Reading a book, playing with kids, starting a new hobby. We carry the same mindset to financial matters -I’ll start planning when I get more money or when I am older or when I get another job. Newsflash: time waits for no man! Time is money, my friend, and money matters are what I will share with you in this post.
Money matter tips from a Chartered Professional Accountant (CPA)
1. Plan, plan, plan
Be clear about the financial future you want for yourself and your family. From holidays to retirement, kids’ education and everything in-between. Be realistic on your estimates, then work towards making that future a reality. Write it down; make projections and see what strides you will need to make, at what pace, to get there. However, life can throw a curveball at you. Don’t be too hard on yourself when this happens. Just keep your eye on the ball, and pat yourself on the back for the small wins towards YOUR goals.
2. Speak to an expert
It’s very easy to think financial planning is just about putting your disposable income away into a savings account and letting it grow by the single digit interest rates the bank is offering you. Unfortunately, oftentimes the cost of living goes up faster than those savings. Your financial plan needs to always be a step ahead of the economics around you. Speak to an expert (e.g. accountant, broker, financial advisor) to come up with a tailor-made plan for you. That way, you’re more likely to stick to it. And ultimately get on the right path to not fail financially.
3. Restructure your debt
Contrary to popular belief, not all debt is bad. You will need debt to grow that balance sheet. BUT, it’s easy to get carried away in a world of credit cards and lines of credit that seem to be there for you more than your debit card. Take time to structure your debt in such a way that your debt is for growing your investments and emergencies. Toy around with interest rates and replace high interest-bearing debt with low interest-bearing debt, for example. A financial advisor can help you structure your debt in a way that works for you, and not the other way around.
4. Be disciplined
Don’t be impulsive. Yes, it’s on sale but do you need it? Would you have given it a second look had it not been on sale?
The power of budgeting is often overtaken by that voice in your head that says ‘I’ve been working hard, I deserve this’ or ‘everyone around me has it’. It’s crucial to go back to the basics when it comes to needs and wants. That way, you will determine the value of any purchase before you indulge; whether it’s worth forking out your hard-earned money or not.
5. Have an accountability partner
We all need that one person. That one who keeps us in check, brings us back to reality and cares enough to help us make sound financial decisions. It’s difficult to fail financially when you have an accountability partner. Your accountability partner needs to be someone with whom you have common beliefs, and resonate with in terms of principles and perspectives on life. This can simply be your spouse; your disciplined spouse, of course!
6. Stop procrastinating!
Lastly, but mostly importantly – start today! Don’t procrastinate, make a small but comfortable start. Always remember there’s only one way to eat an elephant: one bite at a time!
Excluded from this list is self-care, and that within realistic expenditure. Self-care is very important because you have one life and one body, so take care of it. Together with planning, discipline, expert advice, managing debt, an accountability partner and prompt action, these and more can work together for your financial good. Let not future generations look back and wonder how you were able to fail financially when others made it.
