Financial Stewardship

Finances, in any organization, life or home is a vital tool for sustainability. One of the first indicators of corporate distress is poor financial performance. In view of this, it is essential that proper financial stewardship is taken with utmost importance all the way.

What is Finance?

It is a term used for matters regarding the management, creation, and study of money and investments. It can be simply put as research upon matter regarding any usage or reference to money.

It can either be categorized as Public, Corporate and Personal finance.

What is Stewardship?

Stewardship is referred to as the careful and responsible management of things. It is conducting, supervising, or managing something, especially the careful and responsible management of something entrusted to one’s care. It is responsibly overseeing and protecting anything considered worth caring for and preserving.

Bringing the two words together: ‘Financial stewardship can be described as responsible management of money or assets.’ It is being faithful with financial duties and monetary responsibilities”

Principles Guiding Good Financial Stewardship

1. Ownership: The owner of an asset takes extra care to protect and prevent damage. Ownership also ensures the growth or multiplication of what is owned. Each time we have the responsibility of financial stewardship; whether personal or corporate, private or public, we must own the duty of care; not just as told but as required. A lot of people have missed out in privileges and honour because they treat their financial stewardship with levity and not as owners. No owner will seek to defraud himself or put his finances into bad risks. We must treat other people’s money with the same standard of care as if we are the owners; our ownership mentality is only applicable to care and not to unauthorized usage of other people’s money entrusted in our care.
2. Responsibility: A good financial steward must be equipped with necessary skills needed in day-to-day operation of the owner’s business and financial prosperity. Taking advantage of opportunities around him, being knowledgeable of the threats in his line of business and how to militate against them. He must take adequate measures to invest in profitable ventures, save proceeds in reputable custody and respond to demanding obligations such as taxes in order to protect the assets.
3. Accountability: There must be periodic rendering of report, performance evaluation and assessment. Accountability is a vital tool in stewardship, it is a means through which the owner gets familiar with the operations and performance of his business and reliability of the manager. In public and corporate businesses, it is mandatory that reports are prepared periodically in order to assess the performance of each department, unit, and the business at large. Accountability is not left out in personal finance as well; you are accountable to yourself, family, trusted friends and ultimately to God.
4. Reward/Sanction: Performance evaluation often results in rewards or sanctions depending on the outcome. A good performance should attract reward to enhance better performance while a poor performance should not be overlooked. There should be sanctions where necessary in order to stem the wrong tide

Qualities of good financial stewardship

2. Proper Budgeting and Planning: Having a periodic budget and proper planning for both income and expenditure is very important. Endeavour to stick to your budget strictly. Avoid buying on impulse, overspending, and luxurious investment on liability. Concentrate on the most important thing at a time.
3. Be Value Driven: Your buying decisions should be based on value to be derived on purchase and not just to impress anyone or to show off. Differentiate between your real needs and wants, go for quality purchases and not necessarily quantity (inferior goods). Always ensure you get value for the money spent.
4. Credit Worthiness: It is very possible to start a business without personal capital. This has to do with using other people’s money (OPM) in form of credit, loan etc. for your business. Many businesses we see today started with OPM. There are various credit facilities available for business owners everywhere, but it must be noted that the lenders/investors are looking for commitment, faithfulness, discipline, and credit worthiness among others before they will commit their hard-earned funds into your business.
5. Savings: A good financial steward is dedicated to separating a certain amount/percentage of his income to a savings account regularly. You should not ‘feed with all your ten fingers’. Cut down on your expenses, and go for necessities and not luxuries.
6. Investment: Look for a viable investment and commit your funds to it. Invest in assets and not liabilities, invest in other people’s businesses viable for additional income. Increase your income-generating capacity, and have as many streams of income as possible. Your health is a very important investment too. Put your money into education, technology, and relevant skills that can enhance your performance and income. Don’t be too harsh on yourself, eat well, sleep well, and dress well.
7. Be a blessing to others – Give: Remember to bless others, give to the needy around you. Your social responsibility has consequences on your financial wellness. Your brand must be notably caring so your products can be received through the advertisement of beneficiaries.

In conclusion, always note that you are responsible to others as a steward and you are expected to carry out your duty with utmost care. Stay conscious of accountability; what goes round, comes round.