10 Aug 2015

Stop Being Broke! 7 Habits of Highly Effective ‘Personal Finance’ People

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Okay, I confess this article is not about all the seven habits from Steven Covey’s bestselling classic ‘The 7 habits of highly effective people’. But it borrows heavily from the book.

(By the way, that is one of my top 7 favorite books, you should read it if you haven’t. Of course, the book is so popular and effective that it has spawned a couple of other titles such as ‘7 Habits of Highly Effective Teens’ by Sean Covey, ‘7 Habits of Highly Effective Marketing Professionals’ by Steven Covey, and the sequel ‘The 8th Habit’.)


The priority of prioritizing
This article is about helping you stop being broke every month, year, and decade, by looking at one habit that can keep you perpetually poor if you don’t handle it.


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The seven habits, from the book, are:

  1. Be proactive
  2. Begin with the end in mind
  3. Put first things first
  4. Think Win-Win
  5. Seek first to understand...then be understood
  6. Synergize, and 
  7. Sharpen the saw
Today’s post is really about the third habit- Setting one’s priorities, especially as regards our finances.

The slogan of this blog is ‘Your success curve won’t go up if your finances are going down’, and the earlier we all realize that our success in life is tied to the way we manage our finances, the better for us.


I am guilty myself, often forgetting and flouting that simple principle by attending to urgent things at the expense of the important things. And worse, spending my money on frivolous and urgent things such as impulsive buying, giving out money to church, friends and family (immediately they ask) without first budgeting for the expense, or reviewing my budget accordingly, and so on. 

You should take time to divide your expenses/finances according to the urgent-important matrix.


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Credit: myaudi.club
Budget your Church/Charity donations
Notice I added church. While I believe that God owns all -100%- of
our money (and not just the Tithe or 10%), and I believe that God can instruct you to give it all out (i.e. if you have developed a matured relationship with his Spirit). The truth is that majority of people/Christians today are not at that faith-spiritual maturity level, neither are they financially disciplined. And that is why it is easy for you to impulsively give all your salary at a church service where the speaker has appealed to your emotions with sweet oratorical words- even though God has not instructed you to give.


Avoid impulsive decisions and urgent spending
Many are broke because they spend impulsively -whether it is shopping online with their credit cards, or when promising a close friend/relative something expensive on the spur of the moment, or negotiating a business deal/payment/salary without getting the best terms, or whatever. If you look closely at your finances and your expenditure in the last 6 months, you will realize that your unnecessary ‘losses’ have come mostly through this route.

Those long phone calls you (convince yourself and rationalize that you) just have to make, that shoe you cannot but buy, that Arsenal match you have to watch at the stadium, that equity you have to give/transfer to a friend, justifying paying double to your painter/car dealer/Personal Assistant, justifying giving an expensive tip to that ‘customer’ waiter at your favorite restaurant, etc.


All these little foxes add up and eventually spoil the vine.

What bills do you pay monthly/annually?
Whatever deals or subscriptions you are presently paying for, I challenge you to review it all. Whether it is your cable TV subscription, or internet subscription, or your subscription to a magazine or favorite sports club, please think long and hard about it. If you are always broke every month, then cancel some of them. Think about the things you spend money on regularly and ask yourself:

What will happen this month if I don’t make this subscription?

Go one whole month off your subscriptions- this will help you know which are really important, and which ones are simply urgent.

If you can’t manage 24 hours effectively, 25 hours still won’t be enough 
There are a whole lot of other books, and blog posts on effective time and money management, and other issues I have raised in this short blog post concerning prioritizing and budgeting our expenses. And you might have read a couple.

But I hope I further helped you see that the key to abundance lies not in making/getting more (wants, cars, money, time and so on), but in effectively managing the little one has. Stopping wanting what you already have...simply maximize it. 


True effectiveness isn’t in having more, but making the most of what we have already (been given).



I won't forget again, and I hope you don't too. 
Cheers!


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