Financial Intelligence VI.
There is no denying the fact that our finance is important and how we manage it speaks a lot about who we are and also about how far we can go.
Finance is really important and it speaks volume as to determine what you can achieve and not achieve. Not every money that comes into our hands has to be spent. Not every money is a bread, but a seed and when I mean a seed, I mean something to invest, to bring about a greater increase for you. If what you are to use as a seed is consumed as a bread, then such a person would be at the mercy of others because as an economist, resources are limited and our desires and wants are unlimited.
This post seeks to address how we can have a better understanding of how our finance works, so we can make good use of what comes into our hands. If we manage our cash flows well (what comes in and goes out), then we can plan our lives well and manage situations better.
STEPS TO FINANCIAL FREEDOM
SET FINANCIAL GOALS:
In the last post, i talked about the third point on how to set a working financial goal.
How do we set reasonable and working financial goals? We need to be S.S.M.A.R.T about it.
A - Achievable: Your financial goal must be realistic and achievable. A lot of people set unrealistic target. "Oh, i want to make 100 Million Naira (Nigeria local currency) in 12 months". The truth is, how much do you earn? I know there is a place for faith, absolutely, but with due financial intelligence, you need to work with what you are first certain of and also what is reasonable.
You earn 100,000 Naira (Nigeria local currency) and you promised to have saved 1,200,000 Naira (Nigeria local currency) by the end of 12th month. How realistic is that? Do you mean you won't eat, do certain things or even touch that salary at all? If you have other source of income, perfect, then your income isn't 100,000 naira.
To avoid frustration and giving up easily, to attain that financial freedom, you need to be realistic as to how possible it is to achieve your financial goal. The above scenario is not a viable one considering how much such a person is earning or would earn. Financial freedom is not depriving yourself of your daily needs at the expense of future savings. Make it achievable.
R - Realistic: It must be realistic. I would link this with the point i just shared above; Achievable. Make sure your goal is something that can be achieved and not just a wishful thinking. Be real, be practical and be realistic about the chances of achieving that said goal.
The above scenarios are not only unachievable, based on the income in question, but they are also not realistic. How do you earn your income and won't touch it, yet you have not other source of income???
...to be continued...
Thank you for your time.
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