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At its essence, financial planning is a game and there are rules you need to follow if you wish to win. Keep in mind that there will be odds against you and unforeseen obstacles may rear their ugly heads. Your best chances of winning will be to obey the time-tested rules that govern the game… the pillars of financial planning which will keep you on track regardless of market fluctuations, pandemics, inflation, etc. 1. You must have a budgetThere’s a quote in Charles Dickens’ book, David Copperfield, “Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” This is old wisdom that still holds true to this day. If your expenses exceed your income, you’ll constantly be in debt. Getting your finances in order will be a Herculean task and you’ll always be behind the 8-ball. Create a budget and decide how much you’ll allocate to needs, wants, savings, paying off debt and so on. Stick to this budget and try your best not to deviate from it. 2. Save 10% of your net incomeHere’s an important point to note – the percentage is not as important as the habit.Some people may be so deep in debt that even saving 10% is difficult. If that’s the case, aim for 5% or at the very least, try to save anywhere from $10-$25 a month. When you have even a small amount of money set aside, you’ll shift your mindset just enough to go from a mentality of lack to one with a teeny bit of abundance. It’s not much but it’ll make a WORLD of difference. If you’ve saved $25 a month for 4 months, you’d have a $100 in savings. This will be a refreshing change from before when you were so broke you barely had anything left before the next paycheck came in. As you get better at saving, trim your expenses wherever you can and split the extra between your debt repayment and savings. 3. Pay off debt quicklyBeing in debt can be a soul-sucking experience. The banks are NOT your friends. They’ll willingly give you the credit cards you want as long as you meet the criteria, but the moment you’re slow to pay up, you’ll see them show their fangs. The late payment fees, the interest rates, the calls from the debt collectors, the never-ending bills in the mail will all add stress and pressure on you. It can be a very draining and burdensome experience.The best way to avoid this will be to pay your credit card bills in full and on time. At the very least, make the minimum payments punctually so that you don’t incur late fees. Create a debt repayment plan for yourself and stick to it. It’ll take time, but you’ll come out of debt slowly but surely. If you don’t remedy this problem proactively, you’ll be in financial servitude to the banks for a long time and may even end up filing for bankruptcy. 4. Don’t be impulsiveWhen you have money to invest, do NOT risk it all. Avoid following unsubstantiated ‘tips’ on the market and proceed cautiously. Diversify your portfolio and aim for gradual growth rather than fast wealth which often means riskier investments. 5. Avoid covetous desiresTrying to keep up with the Joneses is an almost sure-fire way to financial ruin, especially if your income isn’t substantial. There’s no point in buying what you don’t need, with money you don’t have, just to impress people who don’t care. Spend wisely and avoid impulsive purchases. 6. Increase your incomeAlways seek to improve your knowledge and skills so that you bring more value to the marketplace and are rewarded handsomely for it. Almost ALL aspects of financial planning can be improved when your income increases.Whether you’re trying to eliminate debt or save for retirement, earning more will accelerate your progress. So, do whatever you can and do the best you can to earn well. 7. Find ways to grow your moneyThis is done by investing in stocks, bonds, etc. Even starting a new business can be seen as a way to grow your wealth. The key is to make your money work for you. Be cautious, but also don’t be overly risk-averse or you’ll miss out some lucrative opportunities. DO your homework before investing and seek to improve your financial literacy whenever you can. 8. You can’t improve what you don’t measure.Watch your key financial numbers carefully over time so that when you keep trying to make improvements, you will understand what’s working and what isn’t. Armed with sufficient knowledge, you’ll be able to make more informed decisions that yield rewards most of the time. The 8 pillars in this article will help. To keep you financially secure and also help you to build wealth… but only if you follow them. Get started today and apply these tips to manage your finances.

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