BASSETERRE St. Kitts – ARE you finding yourself with less and less money to spare? Do you find your funds dwindling through your fingers? Your budget has not changed much, but the after completing weekly or monthly tasks, less money is left?
How about managing your money properly?
Recently, a ‘Trainer of the Trainers’ workshop was held by the Eastern Caribbean Central Bank (ECCB), where some very useful information was passed on to representatives of financial institutions, in an effort to help the general public become more financially savvy.
It is understood that writing up a budget and sticking to it is more of a challenge than one may think, but taking a different route to money management can help.
During the workshop, the financiers were taken through a simple, yet challenging five-step personal financial planning process that may just do the trick in helping one to become better financially established.
• Step one: Analyse your current financial situation i.e. stock taking your finances which includes inventory and valuation of property items, other non-bank related investments, state of financial assets deposited in bank accounts, loans and credits, and other liabilities. By doing so, you will reveal the healthiness of your financial situation and the hidden paths to financial success and/or failure.
• Step two: Develop goals for the various stages of your life. Where do you want to be in the next two years, five years, even ten years? A mental movie exercise is good way of achieving this step. By visualizing yourself achieving your goals, it makes the situation seem real and gives you a renewed sense of wanting to achieve this goal.
Bear in mind that your values (what is important) and your attitude (opinions and judgement) determine your behaviour which in turn determines your financial goals.
Put together an action plan featuring your goals, strategies, tactics and supporting rules. Create a money diary and make a note of everything money is spent on, that way you would realise where money is being wasted, and better identify wants from your needs.
• Step three: Identify and evaluate various strategies that should form the part of a master plan for your life, taking into consideration all of the associated risks. After determining your goals, develop strategies that will help in achieving those goals, taking into consideration all risk factors that can hinder or even blow up those goals.
There will be hidden paths to failure that you should look or for. There are also factors that will affect your decision making and interfere with the goals set. These factors include time constraints, emotional state – judgement clouded by desires and interests, failure to understand the probability of consequences, social or economical pressures, and lack of adequate information or skills.
• Step four: Finalise and implement your master plan in order to achieve your life’s goals.
• Step five: Re-evaluate and revise your plan as needed in order to ensure the attainment of your life’s goals.
Ask yourself if the plan is working. Make notes of milestones attained or missed. When targets are missed, try to look back and identify the warning signals, that way you will be better able to pick up on warning signals long before other targets are missed, and make necessary adjustments to change the outcome.
These are the five steps to personal financial planning that, if implemented and followed religiously, can make all the difference in your life financially.
Everyone would like to have a larger cash flow and good money management can help with that.
Effective money management not only enables you to live comfortably within your means, but also helps you to increase your wealth.
Proper management of your money helps you to stay in control of your money and indeed, your life!
