With the pandemic we experienced this year, we ought to prioritise and give importance to savings. Having emergency fund ALWAYS is a wise idea which is a pool of money earmarked for unplanned expenses.
When unexpected life events occur, the fund act as an insurance policy for your finances; for example, if you have a medical emergency or a sudden job loss or appliance breakdown, you can pay for it using money in your emergency fund so that you don’t have to dip into your savings or go into debt. Every individual must learn prudency as this cannot be over emphasized.
Below are the three golden rules on how to be financially proactive most especially in this trying time;
- Your house rent should be less than what you earn in 2/3 months.
If you look at what your house rent is, you would observe that it accrues more from your income especially for those that live in highbrow locations. Many people rent houses in locations that is by far above their average income, this is a very bad financial habit.
One of the ways Jaiz Bank is helping its customers in terms of rent is through Ijara services. This product is ideal for individuals/Salary employees looking for financing to pay for services such as school fees, rent, medical Bills etc. Under this arrangement the Bank pays for the service and the customer pays back over a period of time.
- Only borrow money to make more money.
Money as we know can solve a lot of problems and it sometimes makes sense to borrow money for things that will improve your life over a long term. Money can equally cause problems as well. Detest from owing a lot. Don’t allow your debt to get out of control.
Be a wise borrower, make sure that borrowing is actually the right choice. If you’ve heard of “good debt” and “bad debt” you’re familiar with the concept: good debt pays for things that provide long-term value and possibly even gain value over time, and bad debt pays for current consumption.
Even if you must to borrow money, make sure you are doing so to make more money. In this case, avoid borrowing for consumption but for investment. You can apply for facility from Jaiz Bank Plc such as our MSME funding for businesses to grow, doing this gives you more leverage to grow and make more money.
- As your income increases your cost of living should decrease or remain the same.
Inflation causes cost of living expenses to regularly increase. As the price of everyday items such as food, housing, gas, clothing, and utilities rises, you observe your spending will also increase. To remain in a consistent financial situation, when your income increases, make sure you maintain a balanced expenditure.
A great advice for you in managing a good financial balance, is to invest your money in facilities such as Jaiz Term Deposit – JTD.
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