Money, particularly the lack of it, is a key factor of stress in our society today. It's even much worse if you're in debt. It can be so overwhelming that one can even sink into depression. We've heard sad stories of how people committed suicide because they couldn't keep up with the demands of life. The truth is we all need to learn how money works, and more importantly, we need to learn how to make money flow in our direction.

If you want to learn how to improve your finances, then this article is for you. If you desire financial freedom, then this article is for you. Just follow me in the next few paragraphs as I present to you practical steps you need to follow to improve your finances:

1) Have a budget: No matter how much you earn, it is important to have a budget. Why? It helps you monitor your income against your expenses. It gives you this sense of accountability about how well you manage your finances. A proper understanding of how it works can help you stop living from pay check to pay check and help you create a plan for your money. So, if you've never been doing this, start today and you'll notice the difference. The key is to be consistent in doing so.

2) Have multiple sources of income: Don't rely on your salary alone if you want to become rich. Figure out how to make more money on the side. No one ever got rich from working at a job from 9-5. Money flows in the direction of value. Start a business that solves problems from people and watch your bank account become fat.

3) Have financial goals: Without financial goals, it'll feel impossible to make progress financially. You need to be deliberate about your finances. Success at anything is not accidental. You need to consciously and intentionally work it out. For instance, your financial goal can be how to get out of debt, or saving for a project. In setting you financial goals, use the SMART method. That is, make sure your goals are Specific, Measurable, Actionable, Realistic and Time bound.

4) Track Your Net worth: To do this, subtract your liabilities from your assets. Do this periodically. It's a good way to know how much your net worth is increasing or decreasing over time. And its also a good way to know your level financially.

5) Save: A foolish person spends all that he makes, but a wise person knows how to save for the rainy day. Don't try to save after spending. Rather, save first, and then spend what is left. No matter how little or how much your income is, cultivate the habit of saving something from it. Make it a habit to save. You can go further by saving for retirement. Don't think that you're still young or that one miracle will happen when you're old. No. Be deliberate about your figure. Always set something aside from your income. This point can't be over-emphasized.

6) Get Insured: An average Nigerian doesn't know the value of insurance, but in developed countries, it is widely practiced. Are you insured? Insurance is a type of financial security that is paramount especially if you are married and/or have kids. No one prays for tragedy, but still, get insured.

7) Focus on building assets: Have you noticed that the rich always invest in assets while the poor always think of how to spend? Let me ask you, whenever money enters your hand, what's the first thing that comes to your mind? If it's what to buy, then you need to change your thinking. Acquiring assets increase your net worth and are the key to building wealth. If you want to be wealthy, learn how to acquire assets and invest.

8) Get Out of Debts ASAP: I've never met anyone who derives joy in owing. The pressure you get from your creditors won't even let you have a good night rest. If you're already in debts, it's fine. Just don't stay there. Draw out a practical plan on how to offset that debt as soon as possible. The key to not living in debt is this: learn how to live below your means. You don't have to wear designers to feel good about yourself. Prioritize your spending. Let go of expensive hobbies. Who are you trying to impress? Your friends on instagram? There's no need for that. Living a fake life is costly. Learn how to cut your coat according to your material (not even size) and keep friends that share the same values as you.

9) Read books on Finances: Knowledge is the only solution to ignorance. Could It just be that the reason you're still struggling financially is because you don't know what to do? I recommend you read books by Brian Tracy, particularly No Excuses. That book changed my life. The key is to keep learning. The world is ever evolving, if you don't keep up by being informed, you'll be left behind. Embrace any form of education that'll make you wealthier. Discover how rich people think. It's all about your mindset.

10) Take action: Realise that no one is coming to save you. You have to save yourself. You can become the next rich person on the block if you take the right steps today. There you have it. The key is to get a little richer everyday. It's a gradual process. Delayed gratification today is a good indicator that you've chosen financial independence.


Ref: Natalie Bacon