Essay Sample on How to Improve One's Financial Situation

Published: 2019-11-04
Essay Sample on How to Improve One's Financial Situation
Type of paper:  Essay
Categories:  Finance Money
Pages: 8
Wordcount: 1939 words
17 min read

Ways that one can use to make an improvement on their current financial situations is one of the most talked-about topics in today's world. However, one trick that most people don't usually know is that the path to follow to ensure ones success is to make an expenditure of an amount less than that which one earns. As the gap between an individuals spending and the amount they make expands, the better position one is as far as managing fiscal stance is. Taking into consideration the elements of thought like accuracy, precision, relevance, depth, breadth, significance and fairness also play essential roles in helping one with the improving their financial situation. In this paper, I will undertake a study on the best ways of ensuring an improvement in the financial status of an individual using multiple perspectives in ensuring an improvement in the financial situation within a firm. So as to improve the financial status of a firm, a whole system approach is applicable by taking into consideration the links between systems and sub-systems, and subsequent solutions arrived at that are tailored to the identified problems.

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Full systems approaches involve identifying the several components of a system and assessing how each and every one of them is related. Whole systems approaches are an important way of analysing organizational participation because; there should be a change in the organization at every level, from the top management to the front line staff if the employees want to achieve some meaningful participation. Participation should be taken as a daily routine. Participation involves operation at different levels since there are numerous ways of bringing everybody on board.

Measures on improving financial stability

First and foremost, one needs to create a plan on how they intend to spend. Most people spend a better chunk of their income on the basic human needs mainly shelter, food and transport. Other expenditures such as loan payments, entertainment, and savings and household costs come in later. This plan works best when it covers a longer period, say a year.

People need to have financial goals. In life, we aspire to own something at one point in time. By having goals, energies are directed towards attaining them. Such goals need to be assessed at the end of the year where one has reached with them. Individuals need to avoid at all costs enticements that retailers have towards buyers. Through this, you get to spend on what you need. Enticement targets mainly the impulse buyers. If controls are made in avoiding unnecessary spending, the financial situation improves as more money is retained.

Having a job is one thing, being conscious about the salary is another aspect altogether. This point applies to people who are salaried since negotiating for salary increments for working class individuals leads to more financial muscle. Negotiations need to be emphasized in the case of promotions, gained experience or when changing jobs. It is also rather evident that most individuals have loans or intend on having loans at one point in time. Loans come with different interest rates hence it is advisable to prioritize the payment of debts that come with very high interests. This point touches on credit cards mostly since they normally have high-interest rates. By paying off such kind of money consuming liabilities faster, more liquidity comes our way in the long run since cash at our disposal finds other important uses.

Norbert D. Frank (2012) states that everyone acquires credit at one point in life thus one is freely entitled to free reports of credits. Reviewing such kinds of reports enables one to fix issues that might interfere with ones credit score. The lower the credit scores translate to lower financial limits which an individual can access from credit institutions. We should also strive to minimise on fees that come with investment. Avoiding expensive products such as mutual funds, which are rather expensive and take up a larger portion of earnings over a long duration, and taking up those which are less expensive such as index funds.Motivating factors that aid in paying debts should be implemented. This can be done by constant remedial of broader goals of what you want to do with your saved up finances. Being focused with such bigger pictures helps in putting a halt to reckless purchases. At times sit is good to work with professionals to manage ones financial situation especially for the nervous type of individuals or those who are on the rise financially. Such professionals are able to tailor solutions that will favour you and work best for you rather than gambling with instincts that will lead to more financial ruin.

Inculcating a step by step early saving towards retirement is also key (Frank, 2012). Continuous ten percent saving throughout ones lifetime will go a long way in ensuring financial stability during retirement. This percentage is not cast in stone, and it is recommended that it increases gradually over time. Saving should not always be pegged on formal employment or earnings thus it is advisable to save even if you are not on regular earning schemes. This takes a lot of sacrifices since it is a scarce defying habit.

In any case you intend to take up loans as a group, one should avoid being guarantors to fellow family members, friends or workmates who have poor financial discipline since when they default on their loans, you will be obliged to repay such kinds of debts as stipulated by the loans contracts. This can drain someone financially especially if you are operating on tight budgets. One needs to be very open with family members, close business associates or even fellow workmates who might have high expectations of you assisting them financially. Honest discussions on needs and perceived expectations and putting limits help in preventing future misunderstandings.

Simplicity is the key to comfortability. Conducting oneself in the most simple and least complicated way helps reduce costs and ensures that one lives within their means (Thomas, 2013). Such measures can be riding a bike to work, home haircuts, cooking at home rather than the hotels etc. Most people dont take insurance seriously. If you have the opportunity to insure yourself, go for it, as it can come in handy when disaster strikes and your savings are at the lowest point. In such instances, the cover caters for the incurred loss and expenses. Cost cutting by reducing the number of catalogue subscriptions is important since such provisions tempts one to unnecessarily buy more of what they dont need.

Participating in charity activities is very noble and in times of scarcity, non-financial donations need to be considered. Such include used toys, cookers, clothes, computers, etc. Before doing any investment, an analysis of risk-verses-reward is to be considered. Though high risks businesses have high returns, there is no point in sinking scarce financial resources in a business that has very high risk and its chances of survival are very minimal. Failed businesses and investments gobble up resources and consequently, they ought to be avoided at all costs. Learning to say no to struggling family members who expect you to bail them out is crucial as it helps in avoiding further debts and digging into savings.

Launching businesses and inculcating an entrepreneurial mind-set especially in times of recession can come in handy. Despite the size of the start-up business, extra income leads to an expanded financial security. This also creates financial income diversity since putting all the eggs in one basket can be a risky affair especially if one source of income runs into trouble and is unable to pick up from the shocks that it might have encountered. Formal jobs should be augmented with other sources of income so that in cases of job losses, there will always be continuity. Spending should always be tracked so as to avoid unnecessary expenditure. In case one gets into a financial pitfall during transitions is normally a great feat (Palmer 2014). In such situations, family assistance can be sought so as to pull together enough resources. Gregory Thomas (2013) states that we all need to fall in love with money so that we can be in a position to manage it well. She goes ahead to encourage women to develop stronger feelings towards finances since women have stronger emotional instincts and attachment. With this technological age, financial life of an individual should be kept off Facebook since such social sites are prone to fraudsters who can use such kind of information against you. But on the contrary, personal bank accounts and favourite stores can be tweeted since financial institutions are increasingly using such platforms to communicate with their clients. Caution should be taken in sharing personal information. You are likely to get attention from retailers and banks and quick responses from the same types of institutions.

Avoiding online ticket scamming schemes which expose people to fraudsters is also one way to prevent pilferage of finances. Personal beliefs about money are instilled and shaped in our various childhood experiences hence probing ones history can shed more light on how close relatives managed their finances. We ought to think about our past experiences with finances regarding past worst experiences, greatest experiences, financial fears and experiences which affect the unleashing of the full potential of an individual (Tartakovsky, 2013).

We should avoid blaming ourselves, friends and past experiences on our past questionable and troublesome experiences (Palmer, 2013). Thus a mind-set of positive attitude is what we are to have at all times. Shifting blame on others for current misfortunes is not advisable. Taking a critical look at the current financial position and implementing budget cuts ensures that little saving is realised. Hard work pays, and there should be no limit in sacrificing precious time so as to improve on your comfort and that of your family. This can be done by taking up more than one job at a time, freelance opportunities and taking advantage of dormant skills by putting them into practice (Palmer, 2013). Bold and lasting actions are taken in terms of limited resources and constrained time especially in trying to fix long-term debts.

Building emergency funds enables individuals to cut the reliance on credit whenever emergency situations arise. When faced with an emergency, it is easy to seek credit which might take a while to repay hence dragging ones long-term investment plans. Tracking down all the finer details of spending by jotting down monthly budgets leads to the maximisation of the little available finances. Personal belongings that add no value in life can be disposed of to create room for valuable ones and earn an extra coin. Avoidance of credit cards due to their high interest should be encouraged and if need be, debit cards are the way to go. It is also important to acquire financial knowledge by wide reading. This is done by thorough scrutiny and study of reading materials that one can come across hence more ideas are discovered on how to improve on the level of finances. Taking ample time to think through new ventures and ideas can save on rushing into businesses that are not clear. Every now and then people come across various business proposals that seem to have very good returns. It is prudent to take time to think through all that has been put on the table before making the final decision. In as much as it seems odd, one can decide on a fixed amount to be paying his or herself (Thomas, 2013). These little payments can be stored in a safe place or account and in the long run, such amounts increase substantially (Cabler, 2011-2016).

According to Jean Folger (2016), striving to spend le...

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