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Financial Success in 2012: Practise the Power of E.L.E.V.E.N.

01 Mar

2012 has now arrived. So how was your financial performance last year? Were you able to successfully navigate and overcome the financial challenges that came your way? What about your investment performance? No matter how well or how bad your financial performance last year, 2012 will bring a new opportunity for you to smartly plan your finances.

In this article, we shall discuss the E.L.E.V.E.N. technique/formula for successfully managing money. This technique is specially designed to help you set and achieve your financial goal(s) for the year:

E – Economise – Differentiate between your needs and wants

As an example, you don’t really need to splurge on expensive items to fulfil your baby’s needs, when cheaper options can do the job just as well. Furthermore, most hypermarkets today offer house brands – quality products that are affordably priced.

L – Live within (and make) your budget

Make a budget, and stick to it! Some parents love to create a rough budget “in their heads”, especially when it comes to shopping time. This method is incorrect. Ideally, you should list down exactly what you need to buy, and more importantly keep to the budget that you have set. Disciplined spending is very important, and this can only be achieved when you make a budget. If you don’t make a budget, there is a very high chance that you will encounter difficulties in managing you and your family’s finances.

E – Emotional Decisions are a No-no

It’s human nature to spend money emotionally when you’ve received your year-end bonus! All of a sudden, there are so many “new” things to buy – new car, new furniture, new holiday destination, etc. What you should actually be doing if you come into some extra money is to firstly put aside some money for yourself (and your family) and then use the rest to settle all your debts. In fact, if you have credit cards, this is the best time for you to settle all your credit card debts. Believe it or not, your life will be a lot more pleasant after you’ve settled those debts.

V – Vigilance – Always be wary of illegal investment schemes

Perhaps you already knew that investing is one of the best ways to grow your money. Therefore, you should only invest via licensed intermediaries, but be cautious of get rich quick and illegal investment schemes. Basically, if a company offers huge profits at no risk, the company and what it does is probably illegal. Protect yourself by ensuring that the company actually has a license to offer investment schemes by contacting the relevant authorities first. Remember, always obtain as much information as possible before you invest your hard-earned money!

E – Emergency Fund

An emergency fund refers to a sum of money that you put aside for use only if something unexpected or major happens. In general, financial experts recommend that you save about three to six months’ worth of your expenses for your emergency fund. By establishing an emergency fund, you will be able to handle financial problems with relative calm and ease. A sufficient emergency fund will also enable you to maintain your lifestyle despite the financial problems.

N – Nurture the concept of finance in your child

Often times, parents incorrectly assume that their child is unable to grasp the concept of finance or money because they are supposedly too young. This assumption is not accurate because realise it or not, a child usually knows how to mimic or copy their parents’ behaviour. Therefore, involve your children in family financial matters. One of the easiest ways to do so is to bring your child with you whenever you are doing a financial transaction. For example, bring your child with you whenever you go banking. This method will help you instil a habit of saving money in your child from a very young age.

Conclusion

Financial success in 2012 lies in your own hands! If you feel the need for some inspiration, just take a look at your lovely spouse, and if you’re still feeling uninspired, take a look at your child’s face. Do the best you can for yourself, your spouse, and your family in order to achieve financial management success. We hope 2011 will be a more stable and successful financial year for your entire family.

~ Source: edited from http://www.min.com.my

 
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Posted by on March 1, 2012 in Bacaan Lain

 

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