How to Take Control of Your Money Over the Next Three Years

Are you tired of living paycheck to paycheck? Do you dream of financial stability and security? The harsh reality is that our physical strength and our ability to actively work will eventually decline and we'll need to rely on our savings or investments to support ourselves. Moreover, the rising costs of goods and services are constantly eroding our income, making it a struggle to make ends meet. 

But is this really the life we want? Living with the constant stress of financial uncertainty, never knowing if we'll ever have enough to cover our expenses? Taking control of our finances is the first step to breaking this cycle. With some simple and practical strategies, you can take charge of your financial situation and start building the financial life you deserve and  can be proud of.

Tip 1—Analyse your Current Financial Situation: Before you can create a plan to improve your finances, you need to understand where you currently stand. Take a close look at your income, expenses and savings. Make a list of: 

1. Your monthly income from all sources including gifts
2. Your fixed expenses(rent, utilities, groceries etc)
3. Your variable expenses(entertainment, hobbies etc)
4. Your savings
5. Investments
6. Debts

This will give you a clear picture of your financial situation and help you identify areas where you can improve. 

Tip 2—Create a Budget and Track Expenses: Once you have an understanding of what your finances look like, create a budget that accounts for all your necessary expenses, savings, investments and debt repayment. Use a budgeting app or Google sheet /Excel ( which are free to use) to track your expenses and stay ontop of your spending.

Tip 3—Pay off High-Interest Debts: Debt of any sort can give you sleepless nights and can also hold you back from achieving financial stability. Make a list of all your debts, including the balance, interest rate, and minimun payment then prioritise paying off the debts with the highest interest rate first. Try as much as possible not to borrow or go for loans unless it is an emergency. Finally, do not spend what you have not yet earned in the hopes of earning and then paying back. What if you are left dissapointed and you never earn to pay back?

Tip 4—Build an Emergency Fund: Life is full of unexpected circumstances—from our repairs to medical bills just to mention a few. An emergency fund helps you cover these expenses without going into debt. Aim to save 3-6 months worth of living expenses as an emergency fund in an easily accessible savings account and keep topping it up as time goes on. For instance, you can choose to either use all or part of any money that comes to you in the form of gifts to set up your emergency fund.

Tip 5—Save and Invest for the Future: Saving and investing can seem intimidating but it is an important step to reaching financial stability. Investing in the stock market is a great way to grow your wealth over time. For instance, in Africa, companies like MTN offer dividend paying stocks to the general public. Just walk into any MTN office and inquire about their investment opportunities, the risks involved and the returns you stand to gain from the amount you invest.

Another option is to invest in landable properties such as real estate. While attaining properties like these can be costly, the good news financial stability doesn't have to be a solo journey. You can pool resources with family and friends who share similar financial goals and then invest in a property together. This way, you can split the profits according to the percentage each person invested after deducting maintenance fees for the landable property.

Tip 6: Get an Additional Source of Income: Having a single source of income can make you vulnerable to financial shocks. So, if your health will permit, consider starting a side hustle or freelancing. If possible invest in dividend paying stocks as discussed above to create an additional stream of income. This will help you:

• Reduce financial stress
• Increase your savings rate
• Accelerate your debt repayment 
• Build wealth steadily.

Tip 7: Make use of Insurance Plans and Pension Contributions : Consider investing in insurance plans to protect yourself and your loved ones from unexpected events like death, accident, diseases and fire outbreaks.  Also,don't forget to contribute to your retirement fund regularly. This will help you build a nest egg for your golden years and ensure a comfortable retirement, while also providing financial security and a peace of mind in the present.

The strategies outlined here can put you on the path of building a secured financial future but you would have to play your part by researching more, staying committed, disciplined and being patient. Anything and everything is possible with the right mindset and right strategies in place.

DISCLAIMER: The information provided in this article is for general informational purposes only and should not be considered as a compulsory financial advice. It is important to do your own further research and seek guidance before making any decision. The author and publisher will not be held accountable or liable for losses or any damages incurred from the use of any information contained herein.