Carefulness is the theme when it comes to personal finance. Whether one is spendthrift or frugal, carefulness should be a principle when making expenditures. Carefulness is simply the aim to achieve financial freedom. That is why very many financial experts, commentators, and even internet blog posts offer some ‘hot personal finance tips’ to help you tighten the purse strings. Most often taking the path of ‘spend less to save more’ some would even suggest that you neglect the purchase of some items that are essential to your personal taste and lifestyle or that you invest your valuable time on learning how to make your own bathing soap.

When carefulness is the theme in your personal finance, times will certainly come when you will be constrained into being frugal because when expenses go unchecked, we risk spending more than we earn. Recent history is filled with the sad stories of lottery winners, celebrities and business people who were once multi-millionaires but have been reduced to poverty because of a lifestyle of unchecked expenditure and poor personal finance management.

Carefulness cannot be reduced to just frugality because frugality cannot be the sole denominator of the methodologies we apply in our personal finance management. Relying on reducing or controlling expenses alone is an ill-advised personal finance management strategy. Strictly focusing on your expense(s) would compel you to reduce the quality of your life and although it might result in more savings, but such extra saving would be increasing tasteless to you. The best personal finance tip we must learn is that income limits your savings more than expenses do. Income is the real obstacle to you achieving your financial goals.

Secondly, a focus on expenditure and savings is not a good personal finance management policy. Savings would over the long run deplete the purchasing power of your money. In economics, business and personal finance purchasing power are different from the real value of your money because of something known as inflation. Inflation reduces the purchasing power of your money, even if the number value remains the same. Also, certain occasions may come when one would be forced to spend his or her savings and in the process depleting a saving account that may have taken so much time to build.

Good Personal finance management should allow you to live up to your tasteful standard without being limited by extreme frugality which is often paraded as the golden personal finance tip. Having a healthy financial future does not always mean total deprivation of self from a tasteful life. Good personal finance management is all about making intelligent financial decisions following a sound financial plan and strategy.

Below illuminates an approach that would bring ease into your personal finance management pattern:

Automation is discipline

Introducing automation into your personal finance strategy is an intelligent financial decision that is both wisdom and discipline. One can automate the payment of essential expenses and savings. It becomes conventional wisdom and a show of financial discipline that an income earner should instruct the bank to at certain dates and after that pay out a specified sum of money to another saving account so owned and/or to certain business counterparts or personal service providers as the case may be. Therefore automation becomes your show of discipline and allows you the peace of knowing that certain aspect of your finances are catered for and you no longer risk making poor financial decisions because of a defect of personality such as a weak-will.

The beginning of automating savings might be tensioned, but that is your financial wisdom working out that wealth creation discipline in you.

Three important financial decisions you must automate:


Creating a savings account and having your bank pay in a certain amount of money from your income account brings ease to your personal finance management model. This could also keep you from subconsciously increasing your expenses as your income increases because you could also increase the amount of money that can be saved. With this model, saving becomes an essential part of your financial plan and a tool to help you achieve your financial goal.


There are many investment options, policies, and models which is beyond the scope of this article. A meeting with your professional money manager or investment professionals would, therefore, be necessary, but one can automate certain investment purchases such as stocks, ETFs, mutual funds, real estates for a fixed amount every month. Further advice on this would require more focused and detailed research.


Automation would help you maximize the ‘compound interest effect’ which occurs when you reinvest back into your ventures the dividends received or accruable to you from initials vestures. This helps you grow your wealth.

Automating these aspects of your life brings ease and helps you focus on other things that demand your scarce attention. It takes minimal efforts to set-up an automation model with your financial institutions and advisors.

Reduce recurring expenses

Expenses that repeat itself without bringing about a significant value into our affairs should be eliminated. It is important we don’t let ourselves spend money that brings no change to our wellbeing. If a recurrent expenditure is inescapable and we appreciate the value it brings to us then that is a good expenditure. Nonetheless, we are to do a forensic review of our expenditure and ensure that nothings take money out of our pockets carelessly as this may have a devastating effect on us achieving our financial goals.

The value of an expenditure differs from person to person, but carefulness is the theme, and your perception of the value it brings to you is the test. For example, an individual who appreciates the changes a gym workout brings about in his body should continue to go and to also pay the expected admission fees however regularly it may be required as it improves the quality of his life. But someone who doesn’t appreciate a gym workout session but rather prefers a hike through natures’ beauty will be better served to cancel his gym workout and perhaps register to a zoo.

The important thing is to make clear choices after conducting a forensic review of our spending patterns. Items which would one day be important are better purchased some other day. Cater for now and the foreseeable future with your recyclable expenditures. Obtaining our expenditure reports are straightforward. To do so, one only has to demand his bank statement, credit card statement and other cashbook/expenditure records we might need. We will surely find certain expenses and unusual purchases we have sub-consciously incurred.

Certain expenses which offer value can still be renegotiated to beat down the price without sacrificing any other comfort or pleasures derivable from it. This is just proper personal financial management seeking maximum comfort per unit cost. As a personal finance tip you can try to exhaust all work-related benefit options because some offices offer us certain options that can provide the comforts we currently enjoy while eliminating the recurrent cost we incur. It is also wise that expenses incurred for work-related researches or personal development exercises such as magazine subscription should be canceled when we no longer have used or need for them.

A point to note…

The inexcusable evil of financial fees can be a scavenger to your wealth as much as anything else. It usually an amount we pay to banks and other financial institution for their services to us. This fees should be watched so as to ensure it doesn’t go over the limits and become an extortion expenditure. Banks usually charge a monthly service fee and overdraft fees. Banks also charge additional fees some charges may be simply because we have an account with them. Carefully take note of how much you are billed and make sure it is for due cause.

Negotiating these charges with the bank is possible as they would have to evaluate your patronage as a customer and the value of your business to them. Also, know that you have other banks as potential options but never be in haste as your current banks may be the better option especially if they save you time and stress.

Interest for short term debts is another scavenger to your wealth. Bank overdraft fees and credit card interests can deplete your wealth beyond measure if not kept in check. The best personal financial management model would be one that avoids completely the use of these service options as banks consider them their sacred cash cows. If your personal financial management strategy cannot eliminate them completely, then the best personal financial tip would be to use the banks with the least interest charges.

Also noteworthy…

Another expense to look out for is the cost incurred during investments such as our stock brokerage account. Stock brokerage firms charge monthly account fees and trading fee which increase with the volume of our trade regardless of whether the purchased or sold investment makes us more money or not. Although the brokerage business space is hugely competitive and their ethical rules are strictly enforced. Brokerage firms also offer trading discounts and account retained discounts to keep and to attract new customers. When there is the possibility of having the same level of competence at lower cost you may be best served to move your stocks portfolio to spare the extra expense as this process is very straight forward.

Using an investment vehicle such as a mutual fund has its benefit, but carefulness yet remains the theme as this may have a huge impact on your expenses and by extension your personal finance goal. Investment advisors may recommend certain investment vehicles whilst emphasizing to you it will be managed by professionals but be sure to know the expected profitability of the investment and the possible expenses which may be incurred because their opinions may be slightly biased due to accruing sales commissions.

When making purchases for investments such as mutual fund, you will be charged certain fee upfront, and these are one-time payment to the institution managing the fund. Also, annually you will be charged with a certain percentage for management fee; this fee is called “expense ratio.”

Expense ratio is between 1% and 2% annually, which might not be much when reading as a percentage but could be significant single expenditure in a year! Mutual funds boast on the technical investment competence of their staff who they call investment professionals, and they peg their exorbitant fees on the promise of such accruing value, but performance shows mutual funds to be less profitable when compared to ETFs and other passive funds. Passive funds billing methods result in lower cost when compared to mutual funds.

A personal finance tip…

Intelligent personal financial management requires that you apply personal efforts to other forms of research. Carefully evaluate the advice you are offered using your financial goal and identify the safest investment option for you. Most importantly, you should be very aware of the expected income of an investment, the actual income of the investment and the reasons why there is a difference in the numbers. Furthermore, don’t leave issues of your expenses to your professional money manager alone know your one-time expenses, recurring expenses, investment expenses, and personal comfort expenses. Knowing this keeps you in charge of your personal finances.

Personal finance management is all about forging your own path and doing things with love to others and within the ambits of the law. You can achieve your goals because all you need is a work-related plan.

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