Financial Planning Basics — Personal Finance


Planning is the foundation of success. And your personal finances do not make an exception. Regardless of where you live, in Nigeria or Vietnam, you need to manage financial planning to improve your standing. Here are the basic tips that will come in handy.

When Planning Your Personal Budget, Consider Income and Expenses

Does money disappear without a trace? Start using a special program for keeping a budget, or buy a notebook. To draw up a budget for a month, you will have to write down all expenses for six months, so you can deduce the average figure and find out how much of your income you can save for the realization of your dreams. Income includes:


  • Salary: your income and your partner’s (if any);
  • Additional part-time jobs;
  • Help from outside (parental, “sponsor”, etc.).


Here is a piece of advice: use modern online banking; many apps have a monthly spending report service — you can immediately see which category your money is flowing into. You can put limits on different categories, such as taxis, entertainment, etc., and the system will notify you when the threshold is exceeded. It helps to manage the family budget.

Get Rid of Unnecessary Expenses

Make yourself rules for harmful expenses, for example, to spend no more than N 25,000 a month on a taxi, or expenses on take-out meals should not exceed N 40,000 a month. Compliance with some of these rules will not only help you find the money for things you really need but also improve your health and nutrition.

A list of expenses will help you identify unnecessary expenses. When the gaze falls once again on the subject of doubtful necessity, ask yourself, “What is it for me?”

An important caveat: spending on children (if you have any) is not considered an unnecessary expense. In addition to the essentials for them, include an extra column in the budget. Pleasant surprises, joint walks to the cinema and outdoors, as well as chocolates, will not only delight the little ones, which is priceless, but will also become a great mutual pastime.

Self-education and new projects

While planning expenses and trying to get rid of unnecessary ones, consider saving some money for the improvement of your skills. In this way, you will be able to increase your income in the future. Undeniably, there are plenty of free resources like the Forextime blog where you can find a lot of useful information on Forex trading for beginners and also for more experienced traders. The most essential is to have the desire to develop and hone new skills.


Before buying an unplanned item, subtract the main expenses from your total income. These include:


  • Payment for the apartment and utilities. If you have your own apartment, it is not recommended to relax: financial planners advise you to set aside the amount that you could spend on rental housing on a monthly basis. It is not included in the free money — later you can buy a new apartment with the saved money and rent it out, or give it to grown-up children.
  • Taxes, fees, and other mandatory payments. Be accurate and punctual in paying them.
  • The money for food for the whole family (or personally for you if you live alone).
  • Expenses for a kindergarten, a sports club, a tutor for a child, etc.
  • Clothes and footwear, which cannot be dispensed with, as well as personal hygiene products and household chemicals.
  • Gifts for loved ones if a holiday is coming. Find an envelope and put some amount into it every month, as a result, you will not have to cut other expenses before the holidays to buy gifts.


Have you subtracted? The remainder is the free money. It is advisable to spend it at the end of the month, on the eve of the next salary. Or save it for something: starting a business, a new apartment, a car. The main thing is that the goal must be real.

Nuance: spontaneous purchases are real happiness for many. A financial diet, like an ordinary one, allows a “zigzag” — it is important to feel the measure.

How to Analyze Budget Execution

At the end of the month, try to gauge how well you have met your plan. Have you managed to increase your capital? It is good if you do this for each budget line. For example, if you allocated N20,000 for the purchase of household goods, and spent N 15,000, this is an unfulfilled item of expenditure. Try to understand why the deviation occurred, how it could have been avoided. This means that it is necessary to adjust the plan, seeking funds to increase the amount in this category of spending.


After a few months, when budgeting and accounting become a habit, you will begin to notice significant improvements in your finances. Perseverance is important here. Develop this new habit, and you will understand how crucial it is to plan your finances.


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