How to Manage Your Personal Finances

There are a lot of things I wish I knew early in life. Managing finances is one of those things. And I am sure I am not alone. But experience has taught me a few things and I’m glad because it’s better late than never.

Yes, some of us were taught a bit of financial planning in school (guised as different topics in subjects/courses depending on your school) and told/cautioned by parents. We have also been taught investing and making our money work for us — financial instruments like treasury bills and bonds, fixed deposits, forex, real estate, agriculture and a host of others. But life also teaches you some lessons that you cannot ignore. I knew about managing finances and investing but never practiced till last year. Before that happened, I was living la vida loca until I realised I’ll ruin myself if I don’t take charge of my finances.

Today, I will share 8 ways you can manage your personal finances. Some of them are often overlooked because they seem insignificant but when you sit to calculate how much goes into these things weekly and/or monthly, you will be amazed.

1. Cancel any subscription you no longer use or can do without. These range from Netflix to DSTV and other apps and software. If you are not home all the time to watch TV, there’s no point paying for a full bouquet. Do an analysis of things you can do without and cancel those subscriptions.
2. Sell off unused items or used items that are in great condition. Thrifting is such a big deal these days and a number of Instagram stores are dedicated to these. Find one or two and submit your items to these vendors and earn cash from them. Wardrobe Merchant, for instance, helps declutter new or used items in perfect condition and has been doing so for years. Items range from clothes to shoes, accessories and more. Feel free to visit their page on Instagram.
3. Reduce transportation costs. If your modes of transportation consists of car hire services like Uber and Bolt, you may want to rethink the frequency of those trips or look for alternative and cost-effective means. You can even consider ride-sharing/splitting the fare if you are lucky enough to have someone going the same direction with you every day, for instance.
4. Prepare your meals from home. Remember times when you asked your parents to buy stuff and their response was “there’s food at home”? Shocker but they were right! LOL. If you can, prepare your meals from home instead of ordering lunch at work everyday.
5. Create an emergency fund. One thing that can zap your cash is debt especially if it has to be repaid with an interest. To avoid this as much as possible, try creating an emergency fund. A friend of mine hates going into the banking hall so most of her transactions are done online. However, she has an account she opened years ago that doesn't have an ATM card or internet banking details. She never requested for these. So every month, she sends a portion of her salary to that account because she knows the only way she can ever reach it is when she goes into the bank to withdraw over the counter. If she ever has to do this, it has become an emergency. You can find your own way of doing this.
6. Have a weekly spend limit. This requires a lot of discipline but it can be done. Calculate what your needs (not wants and desires) are every week and add a little extra just in case. Set this as your limit every week and work towards sticking to it. Yes you can splurge once in a while but don’t make it a habit. This will mean a lot of sacrificing but you’ll appreciate it in the long run.
7. Turn your skills into a side hustle. If you are working at a 9–5 but have skills you can sell to people without interrupting your job, please sell those skills. Good with graphics? Great with handling a social media page? Can help people edit videos? Let people know and start getting paid to do these. I manage social media pages and do a bit of graphic designing, for instance, and I’m letting people know (I just did 😉). You should too.
8. Try the 72-hour spending rule. Have you heard of this rule before? It says “Wait 72 hours before making a purchase to determine if you really need the item”. This rule has helped me a lot of times when I am scrolling through my feed on Instagram and I see eye-catching items. Before sending that DM or WhatsApp message to the vendor, I take some time to reflect. Sometimes, this can take me less than 24 hours and other times over 72 hours. The key is reflecting before making purchases.

Combine these with financial investments that you currently have in place (or work on doing some if you don’t have any) and you just may be on a journey to gaining financial independence.

As I discover more ways, I’ll share with you.

See you in the next post!