Financial management is one of the most important responsibilities of any individual; most importantly for a creative and/ business owner. The consequences of making a single bad financial decision are too dire to even imagine and it is perhaps inevitable that negative consequences will be the direct result of any form of Financial mismanagement- however big or small.
We must also know that it will not only take a new set of resources/tools to straighten the bent rod, it will also require a high level of emotional support (from the people or persons close to this individual in a crisis, or his own personal support-system), intelligence and discipline. The importance of financial management in an organization cannot be overemphasized, seeing as there is no efficient and successful business/ organization, without the proper management of finance.
As an individual, you definitely should not be spending above your income range, unless your desire is to dive directly into a deficit tunnel. In the same vein, an entrepreneur should also not spend all of his business profits; he must endeavor not to consume all of his financial assets, especially on frivolities.
Moving forward, considering strategic plannings is more than a little crucial to every business enterprise, because it creates room for transparency, growth and proper management of resources.
In this article, we have documented four basic factors that can help with your financial management. These factors include:
➢ Discipline
➢ Thirst for Knowledge
➢ Self-Discovery
➢ Positive Mindset
1. DISCIPLINE
A question I used to frequently ponder over is: if the key to building wealth is so simple, why isn’t everyone rich? I realized that the answer to this is quite easy- the success of wealth building eventually comes down to the financial discipline and habits of the individual, or people involved. We must understand that It requires a great amount of discipline and a high level of commitment to one’s goal (s), towards having a healthy financial habit. It will more often than not, require a lot of sacrifices and efforts.
John Jacob Astor, the American business magnate, once said, “Wealth is largely the result of habit.” Therefore, to acquire wealth, you must also acquire financial discipline. These financial disciplines may include but are not limited to:
i. Learning to say ‘no’: Many people underestimate how much learning to say a simple but firm ‘no’ is a great step towards financial discipline. If something does not align with your goals and dreams, it will more likely than not keep you from moving forward; it is a distraction and you should definitely say no to it. We must only say yes to the things that are directly, positively, tied to our goals.
Read also: Tips to kick-start your savings
ii. Disciplining ourselves against side distractions: These side distractions are, for example, the families and friends of ours who spend money just to impress others, our neighbours with all the flashy cars and designers but nothing worthwhile to show for it, our friends who buy the latest gadgets to show off but are barely able to pay their rent. When making any purchasing decisions, it is important to ensure that we are not trying to live life as dictated/ influenced by others.
iii. Disciplining ourselves in our savings: One thing worthy of note, is that the moment you decide to build your wealth, you must immediately take steps towards making it happen: one big step being starting a dedicated savings account. Set up a savings account, decide on a particular amount that will be dedicated to that account (at a stipulated time), and then finally but most importantly, apply extreme discipline towards staying away from that money.. You will find that you can actually save a lot more money, if you are determined to put in the effort. Once you are committed to building wealth, there will be many items in your budget that you discover can either be reduced or even cut off.
2. THIRST FOR KNOWLEDGE
There is a popular saying that our mindset is always the first thing that needs to change before we can truly approach any larger transformations in our lives. And I totally agree.
“Everyone has the ability to build a financial ark to survive and flourish in the future,” Robert Kiyosaki, Author of Rich Dad, Poor Dad. He continues by saying that you “…must invest time in your financial education to build an ark with a solid foundation.”
One important factor we must put into consideration, is that the first step towards building wealth from nothing, is investing time in our financial education. Make it a habit to read books, listen to financial podcasts and interviews, take courses, and follow financial educational blogs. Keep in mind that financial education, like every other kind of education, must be a continuous activity. You must be willing to never stop learning.
3. SELF DISCOVERY
Like the other factors, this also determines the journey one should tread, while on his way towards financial freedom. To attain success individually, we need to identify our strengths and weaknesses. This same rule applies when trying to draw a savings plan. We need to determine a particular amount that we can save up periodically, in order not to fall short in the long run. The choices we make before attempting an action, any action, is a discovery on its own. It is a self-discovery that determines if you will be comfortable with saving a particular amount periodically or not. Also, we can strive to gain more knowledge and be better at the things we’re not. We need to look within ourselves and reach inwards for the greater, better versions of ourselves.
More or less, It is like running a survey on the choices to make. I agree that to think deeply about all of this is not a little feat; more so because it gets deeper by the day; but it also gets interesting, and that is why we should know that the most important method to deal with all of these information is to “find what you’re good at or what gives you satisfaction”, convert it into wealth and become consistent with it.
4. A POSITIVE MINDSET
To keep all of the plans mentioned above intact and to keep a positive spirit alive, we need to keep a positive mindset. To be brutally honest, life can be full of uncertainties and it should go without saying that life can be really bad, even horrible, on some days. But then, eventually, we all need a glimmer of hope: a shining light that comes on to show us the way, and to make our hopeful heart come alive again. We need to constantly remind ourselves to strive to be better, regardless of what life throws our way. A positive mindset fuels a bigger daydream, it fuels the heart and soul, and it fuels the body. It motivates us, gives us the energy to keep it moving- and physically, it strengthens the bones to keep fit.
In conclusion, if you have ever wondered or ever been bothered about how to build wealth from nothing, understand that it is not rocket science-YOU CAN DO IT. You only need to focus on financial discipline, thirst for knowledge, self-discovery and a positive mindset.
Derin Phillips is a financial and investment manager, CEO of Wavis Investment Ltd and an astute business leader with over 10 years of professional experience in developing and implementing business growth strategies, engineering process optimization/operational effectiveness and championing healthy financial decision making.
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