Desmond Bredu is a Chartered Investment Professional (MCSI), a Chartered Accountant (ACCA) and an investment professional. Using his expertise, he shares some tips that will help you on your personal finance management journey.
Follow The 80-20 Rule
The first step to good personal finances is saving, something that a lot of us struggle with. According to Desmond Bredu, when it comes to saving, there is one principle that you need to follow. That’s the 80-20 rule. That means when your salary comes in, all you have to do is save 20%, and you’re already on your journey to great personal finance management.
Know Your Expenses
After taking out your 20% for savings, what is left of your pay should then go towards your expenses. 50% of your pay goes towards your fixed expenses, and then 30% for your variable expenses. The fixed expenses are the essentials that you cannot do without. And the variable expenses are the things like birthday gifts that are not essential per say but are still things you feel important to spend on. These expenses change from month to month.
Stick To Your Budget
Sticking to your budget is the key to being in the right place financially. And in order to make sure that you do, you shouldn’t draw you budget and let it be too tight. You have to leave some room for incidentals and unplanned costs.