In my humble opinion, achieving financial security takes more than a willing heart and reading tons of information online. It entails making a firm decision and having a clear road map of what you want to achieve and how you want to get there. It is about making difficult decisions and sticking to your plan against all odds. It is about understanding the basics of personal finance, financial management, and the philosophy of saving money. From a tender age, we are taught on the benefits of saving, the need to avoid waste of finances through runaway spending and the need to take up investment at a tender age. However, as we grow up, our desire to live the good life, portray the image that our friends or peers expect of us and fallacious desire to fit in takes the better of us.

We find ourselves living a fantasy; portraying an image of financial security and living a lie when in actuality, we are drowning in debt. That story is replicated in many parts of the world especially among individuals who were initially financially secure but after losing everything continue to paint an image of financial security by resorting to debt to finance a lavish lifestyle they can’t afford. I honestly believe that the very first step to understanding the basics of personal finance is accepting your financial situation. Until you admit to yourself that your finances are not in order, there is no way you can take charge of your finances.

Understand that there are fundamental steps you need to take to create wealth and achieve financial security. First and foremost, I have come to learn that you can’t achieve or create wealth if you are not on top of your spending. The first rule of thumb is that you must never spend more than what you earn. Take your time to create a budget based on how much money you make in a month. Draft down your expenses in a month and track every expenditure you make. Once you have a clear picture, try to do away with unnecessary expenditure.

If you notice a lot of your money goes into entertainment or lunch at work, it is time you made some serious sacrifices. For starters, you can decide to go out once in a month and end up saving money you used to go clubbing every night or every weekend. Secondly, you can start making your own lunch at home and carrying it to work. This is instrumental in ensuring that you have more disposable income that you can save over time.

Secondly, make investments. Investments are a great way to get more income and ultimately achieve financial security. You can invest in mutual funds, unit trusts, stocks or even real estates. However, before you invest, ensure that you make sound decisions and that you invest wisely. Thirdly, you cannot achieve financial security if you are embroiled in debt. Purpose to cut down on debt as much as possible. Do not use your credit card unless it’s necessary. In any case, you can always use cash and avoid the “buy now pay later” allure of credit cards. When you do this, I can assure you that you will be on top of your personal finances. It all boils down to making the life changing decision to check your expenditure, budget, invest and prudent debt management!