Getting your finances in ORDER pt 5

Moving from neutral to financially secure part 2

Last week we started with the lifestyle changes that could help us control our spending, avoid impulse buying and free some money on our expenses list in order to facilitate our movement from a financial neutral stage to a secure state. Today we continue with three more lifestyle changes;

1. Save your loose change
You remember the old saying that "little drops of water makes a mighty ocean? well, it applies significantly in finances too. I daresay, even a lot more in finances. In my book "SMART MONEY" i spoke about the phenomenal effects of accumulation. Lets do some very basic math. If you should save 20p a day for 300 days (about a year), that will be 60ghc.This could pay for some very needed items at home or even take a huge chunk off your utility bills.  What if you saved 50p a day? The benefits are enormous. Do not despise the coins, neither discard them. Here is an idea for you;

Get a bottle, a glass jar or a box and drop all your coins and small change into it every evening when you get home. Before you know, you would have amassed a small fortune. Remember, to be pesewa wise is to be a cedi richer.

2. Cook a lot more at home
Many don't realize it but the amount of money spent on eating out in a year is huge! If you are not sure calculate it this way. Imagine you spend about 10ghc a day on meals and you do that consistently for a year, that makes it 3650ghc. Shocking huh?

Save money by cooking a lot more at home than buying from outside. It is healthier, more fun and extremely cost effective. Instead of going out for a movie and buying drinks and popcorn, invite friends over and have a home movie marathon.

Make your own popcorn and mix your own drinks. Throw in some food, music and sweets and you’ve got a party going.

3. Buy in bulk

There are wholesale prices and retail prices everywhere! Always make sure you buy your staples and groceries in bulk. Wholesale prices allow for very significant savings on your monthly food budget and it also makes meal planning easier. Do not forget to check the expiry dates on these items.

Next week we will discuss how we can start planning to become financially secure.

Getting your finances in ORDER pt 4

Moving from neutral to financially secure

Last week we talked about getting from a deficit financial status to a neutral status. The neutral status is where your expenses is always equal to your income. In effect you always spend all you make. There is no money left for savings, much less investments. Living like this is called living on the edge. Any emergency or unexpected expense becomes a huge headache for the family or individual. 

The focus of today's post is to suggest ways on how to organize your expenses in order to leave some spaces and release some funds for savings and later investments. Here are a few guidelines.

Avoid impulse buying

One of the most devastating habits that prevents people from saving money is their inability to resist the impulse to buy. Unless you gain mastery over such impulses you will always struggle to save and therefore invest. Here is how to win the war over impulse buying;

 1. Always make a list and stick to it.

Never got to the mall, shop or supermarket without a list of items to buy. Make sure you have one and stick to just those items.

 2. Avoid taking your debit or credit cards to shop.

 Pay in cash and always only for items on the list. 

3. Stop trying to impress people. 

Most people do not really care. Trying to keep up with the Jones' is what keeps a lot of people incapable of saving or investing their money. Stick to quality and not just quantity. Be content and learn satiety. 

Delay Impulse buying

If you cannot completely avoid it then delay it. Whenever a strong desire to buy comes up, hold off for at least a week. If the desire still persists, then it might be a need after all not just a want or simply a desire. Most of the time, the need to buy reduces and even completely disappear after the week. 

Once you are able to bring the desire to buy on impulse under control, you make it easier to work towards financial security.

Next week we will discuss several other ways you can free up some money on your expenses and get on your way to financial security and later financial freedom.

Getting your finances in ORDER pt 3

From Deficit to Neutral

Knowing your financial status is the most critical stage on your journey to proper financial management. From last week we learned that deficit is where your monthly expenses far exceeds your total income and hence you either have to borrow or you consistently live an impoverished life at the latter end of the month.
More often than not anyone who is in a deficit financial status stage has debt and poor financial habits. The focus of today's post is to help you get out of deficit and step unto the level of neutral. Here are a few guidelines.

 Draw a budget and list your expenses
The first step towards getting out of deficit is to calculate exactly by how much you overspend your income by listing every single thing you  purchase in a small journal. Add up all your purchases and expenses and compare it with your total income.
For guidelines on how to draw a simple budget, refer to my post on budgets.

Be frugal
After you get an idea of exactly how much difference there is, the next step is to initiate a SUPER FRUGAL living plan.

Take the expenses list you made earlier and go to work on it. Group the items into three segments. They are needs, wants and luxuries. Now this is the place where extreme discipline and commitment to a better financial future must be at its strongest. Needs will be the bare necessities, wants will be the little comforts and luxuries will be cut off. Remember, you need to be as merciless as possible in order to remove the luxuries out of your life. This will save some cost and reduce your expenditure.
Do this gradually and progressively until you are able to reduce your expenditure to the level of your income.
Remember this is not going to be a comfortable journey but the destination is worthwhile.

For a lot more ways to reduce your expenditure and save money, get my book SMART MONEY.
Dave Ramsey said, " begin to live as nobody will, so that you can live like nobody can.
...........to be continued.