Managing your personal finances is simply having a clear and objective knowledge about one’s finances.
Managing your finances goes beyond just saving a portion of your income.
It involves having a budget for your income as well as taking into account financial risks and unknown future invests.
This is a topic that is often neglected in out part of the world. However, this forms the basis of creating wealth.
A personal budget simply means have a laid down apportionment of how you intend using any income you receive.
We will learn a simple personal budget in this section. Before that, I want us to appreciate the fact that managing your finances goes beyond just money. It includes your time and any other form of resources.
There is an adage that says “Time is Money”. It is so because time lost may never be regained just like money. If you lose your money through wrong and uninformed investment, it ends there!
It is therefore of great importance that we consciously put our ears and mind to the personal budget below.
I have done a lot of research on the components of a personal budget in terms of percentages for various expenses line. I however believe the list below can help push us to the next level financially.
Before we draw a simple personal budget, I want us to appreciate the components below as a guide;
From the table above, our rent should not be more than 35% of our monthly income. Income here includes both your salary and aside business. If you go over this margin, chances are that your savings fraction will either reduce or diminish.
As we are all aware, Tithe is at a non-negotiable rate of 10%.
With the above said, a simple budget will look like this;
Above table is a typical personal budget that we all need to understand.
With the income column, we are expected to fill in our current income streams. Both current employment and any other source if any. We then fill out the specific expenses line keeping in mind the percentages as stated above.
The purpose of the personal budget is to make you discipline and stay within your means. The bottomline for the budget should be NIL or zero. Your income should be matching the expenses.
Expenses here includes your savings and tithe.
Trust me, you are likely to get a deficit of negative deficit if you slot your current expenses as against your income in this table.
Patrick is a chartered banker and has been a qualified member of the Chartered Institute of Bankers, Ghana with a good membership standing since the year 2013. Patrick is a chartered banker and has been a qualified member of the Chartered Institute of Bankers, Ghana with a good membership standing since the year 2013.