What is financial management and why is it important?
Financial management involves planning, organizing, directing, and controlling financial activities such as
budgeting, investing, and saving. It's essential for achieving financial stability, making informed
decisions, and reaching long-term goals.
How do I set realistic financial goals?
Start by assessing your current financial situation. Define short-term, mid-term, and long-term goals using
the SMART criteria (Specific, Measurable, Achievable, Relevant, Time-bound), and align them with your income
and lifestyle.
What are some key principles of good financial management?
Key principles include budgeting wisely, saving regularly, minimizing debt, investing for the future, and
reviewing financial plans regularly. Discipline and consistency are crucial for effective money management.
How can I manage irregular or variable income?
Base your budget on the lowest expected income. Prioritize essential expenses, build a larger emergency
fund, and track expenses closely. Save more in high-income months to cover the lean periods.
Why should I review my financial plan regularly?
Life circumstances and financial markets change. Regular reviews (quarterly or annually) help you stay on
track, adjust goals, and ensure your plan reflects your current needs and long-term vision.
