Personal Financial Management
• Budgeting
W. Tong (082 922 5269 / wtong@vodamail.co.za)
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Practices of the Rich1
1. Change your mindset! Money works for you and
not you for money! Invest in assets!
2. Educate yourself financially!
3. Pay attention to your money! Spend time to
manage your money and investments!
4. Become financially responsible!
5. Pay God first (tithe)!
6. Reinvest your investment returns
7. Live debt free!
8. Adopt an automatic money system
1. Adapted from John Burley (p57, Building Wealth 101, Trump University)
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Money / Debt Proof Principles*
1. God is the source
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Not your talents, employer, friends or family
These are conduits but God is the source
Talents, abilities, health is God given
2. Money is not for spending
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First manage, then spend
You are a steward / manager NOT a spender
Money not managed will slip through your fingers
* P120, Mary Hunt, “How to Debt-Proof Your Marriage”
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Money / Debt Proof Principles*
3. Never keep it all
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Give it away – no strings attached, no expectancy of return
Give the first part to God- develops gratitude
Don’t rob God (Malachi 3)
To keep it all is to invite greed
4. Never spend it all
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Once you give some, then pay yourself
Save money for emergency, investment
Live on the balance
* P120, Mary Hunt, “How to Debt-Proof Your Marriage”
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Money / Debt Proof Principles*
5. No more new debt
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Debtor becomes slave to the lender
Debt, uncontrolled can spiral out of control
6. More money is not the solution
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Attitude and mindset is the key
If you don’t manage your money you lose it
Money management requires discipline
* P120, Mary Hunt, “How to Debt-Proof Your Marriage”
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Where’s the money going?
1. Do you know how much and where you spend
your money each month? Knowledge is power!
2. Track your spending for a month, especially the
cash
3. Categorise and review your spend
4. Develop a spending plan / budget
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Spending Plan / Budget
1. First know your current spending
patterns
2. Apply the 10-10-80 rule
– Give 10% away
– Invest / Save 10%
– Live within the 80%
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Finding money you didn’t know you had /1
1.
Simplify your life! Retrain your brain / mindset about
money and how to use it
2.
Distinguish between a need and a want! There is very little
you need to live on! Delay gratification where ever possible!
3.
Shop around for lower prices and don’t buy on impulse!
4.
Pay cash/debit card where ever possible (giving away cash
sensitizes you as to where your money is going). Leave the
credit card at home if you cannot control yourself!
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Finding money you didn’t know you had /2
5.
Keep track of your expenses for 30 days OR do initial
detailed budget / spending plan!
6.
Cut up clothing account cards or credit cards if you can’t
control yourself! You only need one credit card!
7.
Beware of marketing that wants you to buy more!
Telemarketing, shop adverts, etc.
8.
Never pay full price! Check for sales! Everything eventually
goes on sale! Do go for fashion / brands (why pay to
advertise for someone else, they should be paying you)!
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Finding money you didn’t know you had /3
9.
Stock up when you can! Buy bulk where its cheaper!
10. Research on big ticket items! Holidays, travel, insurance,
etc. Cut back!
11. Call for quotes on insurance each year! Eg. Car and
household. Re-evaluate insurance as market values change
and so should your insurance. Beware of insurance add-ons
eg. Disability, credit insurance, scratches, other “protection”
type offers
12. Buy a second hand car! A new car depreciates 20-40% in
first 2 years! Buy older than 3 yr cars!
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Finding money you didn’t know you had /4
13. Service your car regularly – it potentially cuts down on
breakdowns and other expensive repairs! Prevention is
better than cure!
14. Ask for discounts and try not to buy full retail prices!
15. If you must use credit cards - Pay off credit cards at first
opportunity, don’t let it attract interest!
16. Reduce your banking fees! Pay by debit card, avoid drawing
too many times! Use only one credit card! Use your own
bank’s ATM to lower costs!
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Finding money you didn’t know you had /5
17. Eat before shopping: Don’t go shopping for groceries
without eating at home first. Leave the kids at home or with
family!
18. Don’t go and shop on an empty stomach
19. Stop shopping! Shopping should not be a hobby or an
occupation!
20. Check item prices! Check brands either high on shelves or
at bottom of shelves! Buy bulk on cleaning materials
wherever you can!
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Finding money you didn’t know you had /6
21. Food – eat healthier. Less processed items and more
natural items! Processed food costs more and has the
highest inflation.
22. Go meatless! The best sources of protein are not animal
proteins but legumes / beans of various types
23. Exercise – take a walk. Do away with gym memberships –
learn to exercise at home. A healthier lifestyle also cuts
medical expenses if you don’t have a medical aid
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Finding money you didn’t know you had /7
24. Turn down the geyser thermostat 2 degrees – summer vs.
winter. Switching on and off doesn’t save electricity. It takes
more energy to warm up the water from scratch.
25. Do it your self! You can save money by fixing it yourself!
26. Liquidate – sell / pawn items you don’t need or haven’t
used in the last year
27. Don’t borrow from micro lenders – try and live within your
means!
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Finding money you didn’t know you had /8
28.Cell phones – NOT everyone in the house
needs a cell phone. Go prepaid instead of
contract. The best things about prepaid:
– No contracts to sign
– No monthly bills
– No long-term commitments
– No credit checks
– No age limits
– No hidden fees
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Some reference material
BOOKS:
• G . Edward Reid, “It’s your money isn’t it?”, Review and Herald Publishing
Association, 1993
• Mary Hunt, “How to Debt-Proof your Marriage”, Revell Books (Baker Publishing
Group), 2003
• Trump University, “Wealth Building 101”, J Wiley & Sons, 2007
• Robert Kyosaki with Sharon L Lechter, “Cashflow Quadrant”, Warner Books, 1999
WEBSITES:
• Crown Financial Ministries, www.crown.org
• www.cheapskatemonthly.com
• http://www.easypersonalfinance.com
• www.johnburley.com/trump
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