Knowing how to manage your personal finance can help alleviate pressures you would feel during tough economic time such as economic recession, general strike, natural disasters etc. Most importantly it will help you prepare for tomorrow’s challenges and help prevent making the same mistakes.
The very first thing that you need to know if you don’t already is to save, save and save. You must have a reserve fund to always fall back on. If you don’t, start one immediately. A reserve fund provides your future a safety net. There are a lot of rules about how much you need to save continuously but the generally acceptable one is that it should not be less that 10% of whatever you earn. What you must realize is that , there is never a period you can stop saving. It is a lifelong process that is very beneficial. Having too much money saved is not a problem; all you need to do is to take the excesses for investment or consumption.
Run your household like a business. During economic growth you will distribute profits while during economic downturn, you adjust accordingly by reducing you expenses to ensure you survive the period. There will be a freeze on employment, reduction in allowances or even layoffs. Once they have adjusted and have freed up more money, companies can invest in undervalued assets and thereby preparing for the future.
It's time to take charge of your finances.
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