PRINCIPLES OF FINANCIAL MANAGEMENT

PRINCIPLES OF FINANCIAL MANAGEMENT
Tayo Onaleye

Psa 112:5 A good man sheweth favour, and lendeth: *he will guide his affairs with discretion.*

It is not enough to learn how to increase your income; it also very crucial to learn how to *manage your money*

Today we shall focus on the financial discipline of *SAVING MONEY*

*1. Make saving money a top financial priority*

Saving money is the foundation of wealth creation.

*How much you retain is far more important than how much you earn.*

There are people earning N1m per month and have no savings and there are those earning just N50k per month and they still find a means to save.

Saving money alone cannot make you wealthy but without saving money you will end up broke even if you hit large fortunes.

If you don't have savings you don't have a financial future.

It's not how much you earn but how much of what you earn is retained.

*2. Develop a system of compulsory regular savings.*

Pay God first. (Tithing)

Pay yourself next (Savings)

If you don't follow this order you may never have anything to save because there will always be one thing or the other demanding expenditure.

Don't attempt to save after spending.

Save first then spend from what is left.

That your income is small is not an acceptable excuse for not saving. There are people earning less than you and they still have savings.

Put the money away where you cannot easily liquidate or mobilise  it. A fixed deposit account or project-targeted account may help with this.

Join a group savings scheme.

Join a cooperative.

These are some of the practical steps that will help you develop a savings culture. 

*3. Spend less than you earn*

Ecc 5:11  *When goods increase, they are increased that eat them:* and what good is there to the owners thereof, saving the beholding of them with their eyes?

There's an economic law called Parkinson's law.

It states that *expenses rise to meet income*

There's a natural human tendency to spend all your income.....and even more.

You must fight this tendency.

Don't immediately upgrade your expenses when you experience an increase in your income otherwise you will fall back to the old level of not having anything to save.

When you get an increase in your income raise your savings before you upgrade your lifestyle.

*4. Don't please people to displease yourself*

The most-powerful financial management word is *NO*

The fear of *"what will people say"* puts people  into financial bondages.

Pro 29:25 The fear of man bringeth a snare: but whoso putteth his trust in the LORD shall be safe.

*Learn to say no* to expenses that are not absolutely necessary. You don't have to buy all the aso ebi for every ceremony around you.

*5. Spend according to a budget.*

Are you getting married?  Are you planning burial ceremony for your aged ones who have passed on?  Draw a budget and sick to it. Ceremonies are phenomenal money wasters in our environment.

*6. Never borrow for consumption*

Cut your coat according to your material.

Avoid living a false life that aims to impress people with what you don't have or can't afford.

Avoid trying to catch up with the Joneses.

Don't rent an apartment you will end up struggling to meet up with the next rent.

2Co 10:12 For we dare not make ourselves of the number, or compare ourselves with some that commend themselves: but they measuring themselves by themselves, and comparing themselves among themselves, are not wise

Life is in phases. Live your level per time.

*7. Eliminate waste*

Does it make sense to spend N15,000 per month on TV subscription when your salary is just N100,000?

Identify areas of wasteful spending and cut them off.

Be moderate in entertainment.

*Finally.......how much you retain is much more important than how much you earn.*

You're blessed in Jesus name.