As a financial analyst and someone who offers financial advice, this question comes up a lot.
Almost every client asks it in one form or another
“How do I manage my income?”
“How can I stop spending so much and start saving more?”
Most times, I smile when I hear these questions, you know why? Because they have become very familiar. They sound like a rhyme to me now. And over time, I have learned that the problem is rarely the income itself. The real issue is understanding how money works for you.
Before I share how I manage my income, there is one thing I always make my clients understand first
Everyone earns differently.
And because of that, everyone must manage money differently.
There is no one-size-fits-all formula for financial management.
The foundation of financial management is that it's not about how much you earn, but how well you control what comes in.
When I manage my income, I don’t start by asking, “What do I want to buy?”
I start by asking, “What does my income need to do for me?”
I give every naira an assignment.
Some goes to necessities.
Some goes to savings.
Some goes to investments.
And yes, some goes to enjoyment because balance matters.(Who no like enjoyment?)😁
Managing income is simply telling your money where to go, instead of wondering where it went.
If you earn little, management helps you survive and grow.
If you earn much, management helps you sustain and multiply.
So when people ask me, “How do I manage my income?”
I share my own practices which are:
I know my income level
This simply means knowing what actually comes in, not what I hope will come in. If I earn ₦100,000 monthly, plan with ₦100,000 in mind, not ₦150,000. Imagine fetching water with a bucket. If your bucket can carry 10 liters, but you keep pouring in 15, water will spill every time. The problem is not the bucket, it’s ignoring its capacity. That's the same thing with your income, when you understand your income level, you stop forcing a lifestyle your earnings cannot yet carry, and you manage with less stress and more control.
I understand my priorities
Not everything is urgent, and not everything is important for me. Rent, food, transport, and growth come before impulse spending. For instance, charging your phone you have to power what matters first so it doesn’t shut down on you later.
I plan before I spend
Money behaves better when it has instructions. Before spending, I decide what my income should do for me. It’s like going to the market with a list, without one, you will buy plenty things and still miss what you went there for.
I am very honest with myself (self-discipline)
This is knowing when to say, “I can’t afford this right now,” even when you really want it. It’s like setting an alarm and actually waking up when it rings. I know these part of it is always very difficult, for someone like me I lock my money and set it to a specific date so I won't touch it.😂
So that's it...not too hard huh? This is what I do for myself and I believe everyone has different level of approach to some things, I would like to know how you manage your income,I will as well check out your blog if you have written on it but if you haven't here is the link to join the contest.
@indiaunited/indiaunited-new-contest-and-last-e56ac4e00f99a
P.S: Front cover design with canva
