Dear Protribers,

Welcome to the second quarter of the year! This month at Proshare Foundation; our theme is all about “Mental Wellness’’ but before we go into all of that; let us quickly ask how you fared last quarter… now, here is what we want to say to you… things may not have happened the way you wanted it to go, but progress is about looking ahead, learning from your mistakes and making the commitment to do better.

Today, we have brought you an exciting albeit a popular topic and yes it looks like we emphasize so much on this topic; it is imperative that we all get a deep understanding of this as it forms the basis for ‘’managing our money’’.  What does it profit a man to earn billions and lose it for lack of discipline to keep the money? Contrary to what we all believe; it is twice harder to keep or manage  money than to make it and too many of us are not taking the management of money as seriously as we should.

Who else rolls their eyes when someone speaks to them about budgeting? The first thing that comes to mind is – is it not someone that has money that will be budgeting, with all the crazy bills I have to deal with on a daily basis? Yes, we have heard it all and more and yes, all of your retorts are valid because we know that things are really tough right now?

However, remember when we discussed about imbibing healthy money habits? This is a priority habit to imbibe, the little that comes in from your earnings, there has to be a better way to manage it to perhaps not necessarily saving in chunks, but to at least make sure you are not burying yourself in debts just to meet up with your bills. We are here to not just remind you about the importance of budgeting, but also to learn how to budget right so it does not impair on your mental wellness. There is a right way.

Money management simply refers to how you handle all of your finances, from budgeting to savings, investments and setting your financial wellness goals. 

What most of us forget is that without adequate knowledge of how to manage our money effectively we are invariably setting  up ourselves to encounter many mental health issues.  Not many people are equipped to deal with the pressures of money drama. The question is if you can avoid it why cause trouble by failing to do the right things at the right time especially when you know doing things right simply results to your  peace of mind, less worry and a clear path to financial wellness. 

In 2006, a U.S Law Professor who is currently serving as Senator, Elizabeth Warren published a book titled “All Your Worth: The Ultimate Lifetime Money Plan”. The concept of the book propagated that in budgeting 50% allocated to ‘needs’, 30% to ‘wants’ and 20% to ‘savings’.

Let us quickly examine why the 50/30/20 budgeting rule is our preferred budgeting style to follow. 

1. It is a great tool for people with no patience in tracking their spending in details
2. It is a method that can help us manage our money in an effective, simple and sustainable way
3. This is a flexible method that can help with organizing finances regardless of any unforeseen circumstances.
4. This method helps one save for big purchases with only 20%
5. Debt relief is also a definite with this method because it allows you make provisions for it.
6. It is an easy-to-follow rule and a great method to adopt because of its simplicity, we have often found that people are able to stick to it to reach their long-term financial goals.

How Does the 50/30/20 Rule Work?

1. Know Your Net Income – This is funds that is yours after all tax and pension deductions have been made by your employer. Once you determine your net income; determine what goes to essentials, wants and financial goals each month.

1. Identify what your essentials are. Your 50% goes to your essentials such as – living expenses, monthly bills, food and other essential costs 

1. Identify Your Wants – This is 30% of your income which goes to what you desire. Why is it important to budget for your wants? It is because without making provisions for it; one will usually find the whole idea around budgeting tedious and this leads to frivolous spending which eventual leads to the debt hole. Your wants include – indulging your hobbies, clothing, entertainment, vacations, dining, movies etc. 

1. Define and Identify Your Financial Goals – This rule says that 20% of your budget should go towards making your financial goals happen. These are examples of financial goals – Savings, paying off debts, investments, voluntary contribution to pension scheme.  While the percentage looks small, it makes for sustainability.

1. There is room for improvement- A monthly budget may not make things perfect; it however does make our financial lives easier which definitely influences our mental wellness. You can always adjust the percentages allocated accordingly to fit your lifestyle. This rule can also help you create new financial goals to always meet your financial wellness desires

Conclusively, we ask that you take the time to put pen to paper or go digital but what takes precedence is being honest with yourself and knowing that the journey to financial and mental wellness lies mostly with your decisions and habits you have formed for yourself. Most of us are all about instant gratification; yet this is never lasting but takes us on a path of unhappiness, depression and even loss of life if not managed properly.

If you will like more clarity or wish to reach out to us; do kindly send us an email at info@prosharefoundation.com or check out our social media platforms for more resources for your financial and mental wellness. (Twitter: @ProshareFDN, Instagram: @Prosharefdn, LinkedIn: Prosharefoundation and Facebook: Prosharefoundation)

Remember, we care deeply about your Financial and Mental Wellness. It is possible to achieve these, you only need to put in the work.

With love & wellness,

Proshare Foundation Team.