Since personal finance has not yet become a required subject in schools in Tanzania, most of us might be fairly clueless about how to manage money unless you were fortunate enough to have your parents teach you about the importance of managing your money. In today’s World, financial literacy is needed more than ever; whether you are poor or rich, managing your finances is imperative for you to live a financial stability life.
This article does not teach you how to create wealth but will help to get you on the right path towards being financially stable. And if you have been asking yourself certain daunting questions like: how can I start saving? When will I be able to retire? Will I be able to maintain my basic lifestyle even if I lose my job? How can I put my kids through college without student loans? Then, this is the article for you. In this article, I will share finance tips that will answer those type of questions:
- Don’t Ever Cosign a Loan — If your family member, friend, significant other or anyone asked you to co-sign for a loan, don’t do it. The main reason why someone needs a co-signer for a loan is that they have bad credit or no credit at all which means the lender does not trust them hence they are not qualify for a loan. So when you co-sign for a person and he/she failed to repay the loan, the lender will come after you and demand to repay that loan. This most likely will destroy your relationship with the borrower and disrupt your financial status as you will have to take the burden of repaying the loan which was not in your budget.
- Make Savings a Habit — There is never going to be enough money to save. This is what you must understand and accept if you want to develop the habit of saving. If you wait until you have enough extra cash to save, you will never save! Instead, start saving little that you have now and make it as a part of your monthly budget to develop the savings habit slowly. The fast track to build up your savings is by opening a separate Saving account from your normal Current account because if you see you have money in your normal Current account, you will spend it. I believe our failure to get into the habit of saving regularly is one of the biggest reasons why most of us don’t become financially secure so start saving now.
- Review Your Bank Account Transactions Frequently — When was the last time you look at your transactions on your bank statement? Majority of us will look at the bank statements just to know the balance in our accounts and we do not look at our bank account transactions as often as required hence missing out the chance to spot suspicious transactions, as well as missing out the opportunity to know where your money is going. We should break that habit; look at your transactions in your bank statement at least once per month. As identity theft and fraud are rampant today, it is important to track your bank account transactions to ensure no one is using your information for his/her gain and ruin your financial reputation. In addition, you will not be able to save or plan your finances efficiently if you don’t know where you spend your money; and the transactions on your bank account gives you an idea where your money is going, therefore, a roadmap on which area you need to curb your spending to be financially stable.
Next time, I will share more personal finance tips that will change your financial life.
Written by Kelvin Mkwawa, MBA
Email address: Kelvin.firstname.lastname@example.org
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